<PAGE> 1
NATIONWIDE INVESTING FOUNDATION
NATIONWIDE INVESTING FOUNDATION II
Supplement dated November 28, 1997
to Prospectus dated February 28, 1997
Nationwide Investing Foundation ("NIF") and Nationwide Investing Foundation II
("NIF II") have each entered into an Agreement and Plan of Reorganization,
dated November 24, 1997 (the "Plan"), with Nationwide Investing Foundation III
("NIF III"), an Ohio business trust. Pursuant to the Plan and as listed in the
chart below, a series of NIF III (each an "Acquiring Fund") would acquire all
the assets of a current NIF or NIF II fund (each, a "Fund") in exchange for the
assumption of all the Fund's liabilities and a number of full and fractional
shares of the Acquiring Fund having an aggregate net asset value equal to the
Fund's net assets (the transactions contemplated by the Plan are hereafter
referred to as the "Reorganization"). The Plan also would require the
distribution of the Acquiring Fund shares received to the shareholders of each
of the Funds. For each of the Funds, except the Money Market Fund, the
shareholders would receive Class D shares of the Acquiring Fund. The
shareholders of the Money Market Fund would receive shares of the NIF III Money
Market Fund which are without class designation.
<TABLE>
<CAPTION>
The Acquiring Funds (NIF III) The Funds
<S> <C>
Growth Fund Growth Fund of NIF
Nationwide Fund Nationwide Fund of NIF
Bond Fund Bond Fund of NIF
Tax-Free Income Fund Tax-Free Income Fund of NIF II
Intermediate U.S. Government Bond Fund U.S. Government Income Fund of NIF II
Money Market Fund Money Market Fund of NIF
</TABLE>
The Reorganization is subject to certain regulatory approvals and approval by
the shareholders of each Fund at a Special Meeting of Shareholders currently
expected to be held in February 1998. If the shareholders approve the
Reorganization, it is expected that the Reorganization would be effected on or
about March 1, 1998; however, the Reorganization may be effected on such
earlier or later date as may be determined. There can be no assurance that the
Reorganization will take place when or as currently proposed.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE PROSPECTUS
FOR FUTURE REFERENCE.
<PAGE> 2
[PHOTOGRAPH] [LOGO - NATIONWIDE ADVISORY SERVICES, INC.]
PROSPECTUS
----------
1997
[LOGO - NATIONWIDE ADVISORY SERVICES, INC.]
NATIONWIDE(R) FAMILY OF FUNDS
- -----------------------------
NATIONWIDE(R) GROWTH FUND
NATIONWIDE(R) FUND
NATIONWIDE(R) BOND FUND
NATIONWIDE(R) TAX-FREE INCOME FUND
NATIONWIDE(R) U.S. GOVERNMENT INCOME FUND
NATIONWIDE(R) MONEY MARKET FUND
<PAGE> 3
This Prospectus provides
you with information you
should know before
investing in the Funds.
Read it and keep it for
future reference.
Statements of Additional
Information dated February
28, 1997, incorporated
herein by reference and
containing further
information about the
Funds, have been filed
with the Securities and
Exchange Commission. You
may obtain a copy without
charge by calling or
writing Nationwide
Advisory Services, Inc.
(NAS), Three Nationwide
Plaza, P.O. Box 1492,
Columbus, Ohio 43216-1492.
Nationwide Investing
Foundation (NIF) and
Nationwide Investing
Foundation II (NIF-II) are
diversified open-end
investment management
companies.
NIF was created under the
laws of Michigan by an
Indenture of Trust, dated
May 5, 1933. NIF-II was
created under the laws of
Massachusetts as a
Massachusetts Business
Trust on October 5, 1985.
The Trusts offer shares in
six separate mutual funds,
each with its own
investment objectives.
NIF FUNDS:
Nationwide(R) Growth Fund
Nationwide(R) Fund
Nationwide(R) Bond Fund
Nationwide(R) Money Market
Fund
NIF-II FUNDS:
Nationwide(R) Tax-Free
Income Fund
Nationwide(R) U.S.
Government
Income Fund
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
AN INVESTMENT IN THE NATIONWIDE MONEY MARKET FUND IS
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT
AND THERE CAN BE NO ASSURANCE THAT THE NATIONWIDE MONEY
MARKET FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE.
Three Nationwide Plaza - P.O.
Box 1492
Columbus, Ohio 43216-1492
February 28, 1997
Call toll-free 1-800-848-0920
for information, assistance,
and wire orders, 8 AM-5 PM
Call toll-free 1-800-637-0012
for 24-hour account access
FAX: (614) 249-8705
CONTENTS
<TABLE>
<S> <C>
Summary of Fund Expenses................... 3
Financial Highlights....................... 4
Which Fund Is Right for You................ 6
Historical Performance..................... 7
Objectives, Management, Performance and
Holdings................................. 9
Minimum Investment......................... 15
How to Purchase Shares..................... 16
How to Sell (Redeem) Shares................ 17
Investor Strategies........................ 19
Investor Privileges........................ 20
Investor Services.......................... 23
Management of the Trusts................... 24
The Effect of Interest Rates on Bond
Values................................... 24
Distributions and Taxes.................... 25
Tax Advantages of the Tax-Free Income
Fund..................................... 26
Performance Advertising for the Funds...... 27
Additional Information..................... 29
</TABLE>
NATIONWIDE(R)
FAMILY OF
FUNDS
NATIONWIDE(R)
GROWTH FUND
Capital Appreciation --
Companies of all sizes
NATIONWIDE(R)
FUND
Capital Appreciation --
Generally larger
company stocks
NATIONWIDE(R)
BOND FUND
Monthly Income --
A-Rated or better
debt securities
NATIONWIDE(R)
TAX-FREE INCOME
FUND
Monthly Income --
Free from Federal taxes
NATIONWIDE(R)
U.S. GOVERNMENT
INCOME FUND
Monthly Income --
U.S. Gov't securities
NATIONWIDE(R)
MONEY MARKET FUND
Monthly Income --
Current rates of return
<PAGE> 4
NATIONWIDE(R) FAMILY OF FUNDS
SUMMARY OF
FUND EXPENSES
This summary helps you
understand the various
costs and expenses you
will bear, directly or
indirectly, when investing
in the funds.
For a more detailed
explanation of these
expenses, see "Management
of the Trusts" on page 24.
The expenses and fees in
this table are based on
the fiscal year ended
October 31, 1996.
NIF FUNDS:
Nationwide(R) Growth Fund
Nationwide(R) Fund
Nationwide(R) Bond Fund
Nationwide(R) Money Market
Fund
NIF-II FUNDS:
Nationwide(R) Tax-Free
Income Fund
Nationwide(R) U.S.
Government
Income Fund
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
TAX-FREE U.S. GOV'T MONEY
GROWTH FUND BOND INCOME INCOME MARKET
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases* 4.5% 4.5% 4.5% None None None
Maximum Contingent Deferred
Sales Charge on
Redemptions** None None None 5.0% 5.0% None
Maximum Sales Charge Imposed
on Reinvested Dividends None None None None None None
Redemption Fees(+) None None None None None None
Exchange Fees None None None None None None
</TABLE>
* Lower sales charges are available as the amount of the
investment increases. To receive even greater sales charge
discounts, investors may also include the value of shares
held in other accounts (including household family
members' accounts). See page 20.
** The Contingent Deferred Sales Charge declines by 1%
each year, from 5% to 0% after 5 years. See page 18.
(+) Although no redemption fee is charged, applicable
contingent deferred sales charges apply to redemptions
from the Nationwide Tax-Free Income Fund and Nationwide
U.S. Government Income Fund. If you choose to have your
redemption wired to your bank, a $5 wire transfer fee will
be deducted from the proceeds.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets, after expense
reimbursements)
<TABLE>
<CAPTION>
TAX-FREE U.S. GOV'T MONEY
GROWTH FUND BOND INCOME INCOME MARKET
<S> <C> <C> <C> <C> <C> <C>
Management Fees 0.50% 0.50% 0.50% 0.65% 0.65% 0.45%*
12b-1 Fees 0% 0% 0% 0.20%+ 0.20%+ 0%
Other Expenses 0.14% 0.11% 0.20% 0.11% 0.21% 0.15%
------ ----- ----- -------- ---------- --------
Total Fund Operating Expenses 0.64% 0.61% 0.70% 0.96%+ 1.06%+ 0.60%*
</TABLE>
(+) For the Tax-Free Income and U.S. Government Income
Funds, the distributor will charge a 12b-1 fee of .20%,
rather than the .35% allowed and waive the remaining .15%
until further written notice.
* The investment manager will waive .05% of the .50%
management fee until further written notice.
Example:
The following example illustrates the expenses you would
pay on a $1,000 investment over various time periods
assuming: (1) a 5% annual return, and (2) redemption at
the end of each time period. Contingent deferred sales
charges apply to redemptions of shares held 5 years or
less in the Tax-Free Income and U.S. Government Income
Funds. For more information see page 18.
<TABLE>
<CAPTION>
TAX-FREE U.S. GOV'T MONEY
GROWTH FUND BOND INCOME INCOME MARKET
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 51 $ 51 $ 52 $ 60 $ 10* $ 61 $ 11* $ 6
3 Years $ 65 $ 64 $ 66 $ 61 $ 31* $ 64 $ 34* $ 19
5 Years $ 79 $ 78 $ 82 $ 63 $ 53* $ 68 $ 58* $ 33
10 Years $121 $118 $128 $118 $118* $129 $129* $ 75
</TABLE>
This example should not be considered a representation of
past or future expenses. Actual expenses may be greater or
less than those shown.
* Tax-Free Income and U.S. Government Income expenses
assuming no redemption.
3
<PAGE> 5
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Periods Ended October 31,
<TABLE>
<CAPTION>
Net
Realized Distributions
Net Gain (Loss) from Net Net
Asset and Total Dividends Realized Asset
Value-- Net Unrealized from from Net Gain from Value--
Beginning Investment Appreciation Investment Investment Investment Total End of
of Period Income (Depreciation) Operations Income Transactions Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Growth Fund)
INCOME FROM
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
$ 9.86 $.27 $ (.28) $ (.01) $ (.30) $ (1.21) $ (1.51) $ 8.34
----------------------------------------------------------------------------------------------------------------------------
8.34 .23 1.70 1.93 (.42) (1.07) (1.49) 8.78
----------------------------------------------------------------------------------------------------------------------------
8.78 .31 .63 .94 (.20) (.34) (.54) 9.18
----------------------------------------------------------------------------------------------------------------------------
9.18 .33 (1.53) (1.20) (.31) (.33) (.64) 7.34
----------------------------------------------------------------------------------------------------------------------------
7.34 .22 2.77 2.99 (.25) (.51) (.76) 9.57
----------------------------------------------------------------------------------------------------------------------------
9.57 .20 .46 .66 (.20) (.09) (.29) 9.94
----------------------------------------------------------------------------------------------------------------------------
9.94 .17 1.41 1.58 (.17) (.21) (.38) 11.14
----------------------------------------------------------------------------------------------------------------------------
11.14 .09 .53 .62 (.19) (.22) (.41) 11.35
----------------------------------------------------------------------------------------------------------------------------
11.35 .21 2.10 2.31 (.20) (.24) (.44) 13.22
----------------------------------------------------------------------------------------------------------------------------
13.22 .16 1.36 1.52 (.16) (1.24) (1.40) 13.34
(Nationwide Fund)
$ 14.54 $.36 $ (.19) $ .17 $ (.37) $ (.81) $ (1.18) $13.53
----------------------------------------------------------------------------------------------------------------------------
13.53 .35 1.63 1.98 (.47) (1.42) (1.89) 13.62
----------------------------------------------------------------------------------------------------------------------------
13.62 .44 2.78 3.22 (.45) (1.51) (1.96) 14.88
----------------------------------------------------------------------------------------------------------------------------
14.88 .37 (1.23) (.86) (.39) (1.31) (1.70) 12.32
----------------------------------------------------------------------------------------------------------------------------
12.32 .38 3.97 4.35 (.40) (.50) (.90) 15.77
----------------------------------------------------------------------------------------------------------------------------
15.77 .37 .98 1.35 (.36) (.45) (.81) 16.31
----------------------------------------------------------------------------------------------------------------------------
16.31 .31 .67 .98 (.33) (.41) (.74) 16.55
----------------------------------------------------------------------------------------------------------------------------
16.55 .37 .41 .78 (.36) (.85) (1.21) 16.12
----------------------------------------------------------------------------------------------------------------------------
16.12 .31 2.49 2.80 (.31) (1.26) (1.57) 17.35
----------------------------------------------------------------------------------------------------------------------------
17.35 .36 3.98 4.34 (.35) (.93) (1.28) 20.41
(Bond Fund)
$ 10.21 $.88 $ (.90) $ (.02) $ (.87) $ (.04) $ (.91) $ 9.28
----------------------------------------------------------------------------------------------------------------------------
9.28 .88 .18 1.06 (.99) -- (.99) 9.35
----------------------------------------------------------------------------------------------------------------------------
9.35 .88 (.02) .86 (.84) -- (.84) 9.37
----------------------------------------------------------------------------------------------------------------------------
9.37 .88 (.36) .52 (.90) -- (.90) 8.99
----------------------------------------------------------------------------------------------------------------------------
8.99 .85 .45 1.30 (.83) -- (.83) 9.46
----------------------------------------------------------------------------------------------------------------------------
9.46 .76 .23 .99 (.85) -- (.87)* 9.58
----------------------------------------------------------------------------------------------------------------------------
9.58 .74 .52 1.26 (.77) -- (.77) 10.07
----------------------------------------------------------------------------------------------------------------------------
10.07 .60 (1.56) (.96) (.65) -- (.65) 8.46
----------------------------------------------------------------------------------------------------------------------------
8.46 .63 1.04 1.67 (.63) -- (.63) 9.50
----------------------------------------------------------------------------------------------------------------------------
9.50 .61 (.15) .46 (.62) -- (.62) 9.34
----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Net
Investment Average Net Assets
Expenses Income to Commission at End of
Total to Average Average Portfolio Rate Period
Return Net Assets Net Assets Turnover Paid (000's)
<S> <C> <C> <C> <C> <C> <C> <C>
(Growth Fund)
RATIOS & SUPPLEMENTAL DATA ASSETS YEAR
(.3)% .64% 2.70% 69.9% -- $ 192,723 1987
----------------------------------------------------------------------------------------------------------------------------
28.4 .67 2.82 40.8 -- 231,901 1988
----------------------------------------------------------------------------------------------------------------------------
11.2 .67 3.35 38.8 -- 252,456 1989
----------------------------------------------------------------------------------------------------------------------------
(14.1) .68 3.86 36.2 -- 198,691 1990
----------------------------------------------------------------------------------------------------------------------------
43.4 .68 2.54 12.4 -- 277,019 1991
----------------------------------------------------------------------------------------------------------------------------
6.9 .65 1.97 13.1 -- 330,950 1992
----------------------------------------------------------------------------------------------------------------------------
16.2 .68 1.63 10.2 -- 411,853 1993
----------------------------------------------------------------------------------------------------------------------------
5.7 .68 1.71 14.5 -- 464,715 1994
----------------------------------------------------------------------------------------------------------------------------
21.0 .66 1.66 27.1 -- 582,927 1995
----------------------------------------------------------------------------------------------------------------------------
12.4 .64 1.20 25.6 5.3923c 655,616 1996
(Nationwide Fund)
.9% .62% 2.25% 22.2% -- $ 383,099 1987
----------------------------------------------------------------------------------------------------------------------------
17.2 .63 2.79 13.3 -- 407,175 1988
----------------------------------------------------------------------------------------------------------------------------
27.1 .64 3.21 21.9 -- 469,427 1989
----------------------------------------------------------------------------------------------------------------------------
(7.0) .63 2.69 13.4 -- 441,188 1990
----------------------------------------------------------------------------------------------------------------------------
36.5 .61 2.56 13.6 -- 620,113 1991
----------------------------------------------------------------------------------------------------------------------------
8.7 .61 2.32 12.8 -- 726,012 1992
----------------------------------------------------------------------------------------------------------------------------
6.2 .62 1.96 25.8 -- 753,239 1993
----------------------------------------------------------------------------------------------------------------------------
4.9 .63 2.26 15.4 -- 706,674 1994
----------------------------------------------------------------------------------------------------------------------------
19.2 .63 1.95 16.5 -- 795,666 1995
----------------------------------------------------------------------------------------------------------------------------
26.1 .61 1.89 16.7 5.9393c 958,590 1996
(Bond Fund)
(.3)% .70% 8.95% 61.2% -- $ 32,712 1987
----------------------------------------------------------------------------------------------------------------------------
12.0 .66 9.45 73.1 -- 35,759 1988
----------------------------------------------------------------------------------------------------------------------------
9.7 .68 9.38 72.7 -- 36,430 1989
----------------------------------------------------------------------------------------------------------------------------
5.9 .68 9.62 82.1 -- 36,378 1990
----------------------------------------------------------------------------------------------------------------------------
15.1 .67 9.13 93.6 -- 54,187 1991
----------------------------------------------------------------------------------------------------------------------------
10.9 .65 8.63 100.8 -- 90,187 1992
----------------------------------------------------------------------------------------------------------------------------
13.6 .68 7.63 68.5 -- 151,090 1993
----------------------------------------------------------------------------------------------------------------------------
(9.8%) .71 7.11 58.0 -- 124,455 1994
----------------------------------------------------------------------------------------------------------------------------
20.4 .71 7.04 70.4 -- 133,633 1995
----------------------------------------------------------------------------------------------------------------------------
5.1 .70 6.60 39.0 -- 133,253 1996
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Includes $.02 from Paid In Capital.
THE INFORMATION IN THE ABOVE TABLES HAS BEEN AUDITED BY KPMG PEAT MARWICK LLP,
INDEPENDENT AUDITORS, WHOSE REPORTS THEREON INSOFAR AS IT RELATES TO EACH OF THE
YEARS IN THE FIVE YEAR PERIOD ENDED OCTOBER 31, 1996, APPEAR IN THE STATEMENTS
OF ADDITIONAL INFORMATION. THE STATEMENTS OF ADDITIONAL INFORMATION AND THE
ANNUAL REPORT FOR THE FUNDS, WHICH CONTAIN FURTHER INFORMATION ABOUT THE FUNDS'
PERFORMANCE INCLUDING MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE, MAY BE
OBTAINED FREE OF CHARGE BY CALLING 1-800-848-0920.
4
<PAGE> 6
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Periods Ended October 31,
<TABLE>
<CAPTION>
Net
Realized Distributions
Net Gain (Loss) from Net Net
Asset and Total Dividends Realized Asset
Value-- Net Unrealized from from Net Gain from Value--
Beginning Investment Appreciation Investment Investment Investment Total End of
of Period Income (Depreciation) Operations Income Transactions Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Tax-Free Income)
INCOME FROM
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
$ 9.99 $.61 $(1.35) $ (.74) $ (.61) $ (.03) $ (.64) $ 8.61
----------------------------------------------------------------------------------------------------------------------------
8.61 .62 .75 1.37 (.62) -- (.62) 9.36
----------------------------------------------------------------------------------------------------------------------------
9.36 .62 .08 .70 (.62) -- (.62) 9.44
----------------------------------------------------------------------------------------------------------------------------
9.44 .61 (.13) .48 (.61) -- (.61) 9.31
----------------------------------------------------------------------------------------------------------------------------
9.31 .58 .50 1.08 (.58) -- (.58) 9.81
----------------------------------------------------------------------------------------------------------------------------
9.81 .56 .13 .69 (.56) -- (.56) 9.94
----------------------------------------------------------------------------------------------------------------------------
9.94 .54 1.10 1.64 (.54) (.09) (.63) 10.95
----------------------------------------------------------------------------------------------------------------------------
10.95 .53 (1.45) (.92) (.51) (.12) (.63) 9.40
----------------------------------------------------------------------------------------------------------------------------
9.40 .51 .84 1.35 (.53) -- (.53) 10.22
----------------------------------------------------------------------------------------------------------------------------
10.22 .51 .02 .53 (.51) -- (.51) 10.24
(U.S. Gov't)
$ 10.00 $.46 $ (.03) $ .43 $ (.46) $ -- $ (.46) $ 9.97
----------------------------------------------------------------------------------------------------------------------------
9.97 .53 .45 .98 (.53) (.16) (.69) 10.26
----------------------------------------------------------------------------------------------------------------------------
10.26 .54 (.96) (.42) (.55) (.07) (.62) 9.22
----------------------------------------------------------------------------------------------------------------------------
9.22 .59 .89 1.48 (.58) -- (.58) 10.12
----------------------------------------------------------------------------------------------------------------------------
10.12 .59 (.08) .51 (.59)** -- (.59) 10.04
</TABLE>
<TABLE>
<CAPTION>
Net Net
Investment Investment Net Assets
Expenses Expenses Income to Income to at End of
Total to Average to Average Average Average Portfolio Period
Return Net Assets Net Assets* Net Assets Net Assets* Turnover (000's)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Tax-Free Income)
RATIOS & SUPPLEMENTAL DATA ASSETS YEAR
(7.9)% .97% 1.32% 6.42% 6.32% 202.8% $ 37,815 1987
----------------------------------------------------------------------------------------------------------------------------
16.3 .86 1.21 6.82 6.45 117.7 51,884 1988
----------------------------------------------------------------------------------------------------------------------------
7.7 .85 1.20 6.62 6.28 79.7 72,097 1989
----------------------------------------------------------------------------------------------------------------------------
5.3 .90 1.16 6.51 6.25 68.9 89,374 1990
----------------------------------------------------------------------------------------------------------------------------
11.9 1.01 1.16 6.05 5.90 45.5 122,005 1991
----------------------------------------------------------------------------------------------------------------------------
7.2 .98 1.13 5.62 5.47 69.8 170,650 1992
----------------------------------------------------------------------------------------------------------------------------
17.0 .98 1.13 5.07 4.92 28.4 253,042 1993
----------------------------------------------------------------------------------------------------------------------------
(8.7) .99 1.14 5.02 4.87 59.2 241,097 1994
----------------------------------------------------------------------------------------------------------------------------
14.7 .98 1.13 5.20 5.05 31.7 262,484 1995
----------------------------------------------------------------------------------------------------------------------------
5.3 .96 1.11 4.98 4.83 24.2 264,642 1996
(U.S. Gov't)
7.3% 1.00% 1.17% 6.38% 6.21% 157.4% $ 18,211 1992#
----------------------------------------------------------------------------------------------------------------------------
10.2 1.10 1.25 5.12 4.97 99.0 38,452 1993
----------------------------------------------------------------------------------------------------------------------------
(4.2) 1.09 1.24 5.62 5.47 67.5 37,749 1994
----------------------------------------------------------------------------------------------------------------------------
16.5 1.00 1.23 5.92 5.77 25.4 39,777 1995
----------------------------------------------------------------------------------------------------------------------------
5.3 1.06 1.21 5.86 5.71 9.3 39,497 1996
</TABLE>
# Period from February 10, 1992 (date of commencement of operations)
through October 31, 1992. Ratio percentages and total return are
annualized for periods of less than twelve months.
<TABLE>
<CAPTION>
Net
Realized Distributions
Net Gain (Loss) from Net Net
Asset and Total Dividends Realized Asset
Value-- Net Unrealized from from Net Gain from Value--
Beginning Investment Appreciation Investment Investment Investment Total End of
of Period Income (Depreciation) Operations Income Transactions Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Tax-Free Income)
INCOME FROM
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
(Money Market)
$ 1.00 $.06 -- $ .06 $ (.06) -- $ (.06) $ 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .07 -- .07 (.07) -- (.07) 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .09 -- .09 (.09) -- (.09) 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .08 -- .08 (.08) -- (.08) 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .06 -- .06 (.06) -- (.06) 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .03 -- .03 (.03) -- (.03) 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .03 -- .03 (.03) -- (.03) 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .03 -- .03 (.03) -- (.03) 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .05 -- .05 (.05) -- (.05) 1.00
----------------------------------------------------------------------------------------------------------------------------
1.00 .05 -- .05 (.05) -- (.05) 1.00
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Net Net
Investment Investment Net Assets
Expenses Expenses Income to Income to at End of
Total to Average to Average Average Average Portfolio Period
Return Net Assets Net Assets* Net Assets Net Assets* Turnover (000's)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Money Market Fund)
RATIOS & SUPPLEMENTAL DATA ASSETS YEAR
5.9% .79% .79% 5.75% 5.75% -- $ 388,750 1987
----------------------------------------------------------------------------------------------------------------------------
6.9 .76 .76 6.71 6.71 -- 421,901 1988
----------------------------------------------------------------------------------------------------------------------------
8.9 .74 .74 8.55 8.55 -- 535,257 1989
----------------------------------------------------------------------------------------------------------------------------
8.0 .73 .73 7.67 7.67 -- 600,324 1990
----------------------------------------------------------------------------------------------------------------------------
6.1 .71 .71 5.97 5.97 -- 594,987 1991
----------------------------------------------------------------------------------------------------------------------------
3.5 .71 .71 3.50 3.50 -- 488,998 1992
----------------------------------------------------------------------------------------------------------------------------
2.6 .70 .73 2.57 2.54 -- 418,615 1993
----------------------------------------------------------------------------------------------------------------------------
3.3 .65 .70 3.33 3.28 -- 491,737 1994
----------------------------------------------------------------------------------------------------------------------------
5.5 .62 .67 5.34 5.29 -- 604,711 1995
----------------------------------------------------------------------------------------------------------------------------
5.1 .60 .65 4.93 4.88 -- 729,500 1996
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Ratios calculated as if no expenses were waived.
**Includes $.01 dividend in excess of net investment income.
THE INFORMATION IN THE ABOVE TABLES HAS BEEN AUDITED BY KPMG PEAT MARWICK LLP,
INDEPENDENT AUDITORS, WHOSE REPORTS THEREON INSOFAR AS IT RELATES TO EACH OF THE
YEARS IN THE FIVE YEAR PERIOD ENDED OCTOBER 31, 1996, APPEAR IN THE STATEMENTS
OF ADDITIONAL INFORMATION. THE STATEMENTS OF ADDITIONAL INFORMATION AND THE
ANNUAL REPORT FOR THE FUNDS, WHICH CONTAIN FURTHER INFORMATION ABOUT THE FUNDS'
PERFORMANCE INCLUDING MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE, MAY BE
OBTAINED FREE OF CHARGE BY CALLING 1-800-848-0920.
5
<PAGE> 7
NATIONWIDE(R) FAMILY OF FUNDS
WHICH FUND IS RIGHT FOR YOU?
Long-term and short-term goals require different financial planning. Whether
you're seeking greater growth opportunity, looking for more income, or a
combination of both, Nationwide's Family of Funds, strategies, and services may
help.
CONSIDER YOUR TIME FRAME
For long-term goals, you have the luxury of time on your side. With goals five
or more years away -- where growth of your money is the highest priority -- you
may want to consider Nationwide's common stock funds (Growth or Fund). These
funds provide greater long-term return potential through portfolios of common
stocks.
If you're seeking greater income today, have intermediate to long-term goals, or
as the time to your long-term goals get closer -- you may consider Nationwide's
income-oriented funds (Bond, Tax-Free Income or U.S. Government Income). These
funds invest in high-quality bonds, providing monthly income and normally
provide greater price stability than stock funds. Plus, it is possible to have
capital appreciation in these funds.
For short-term goals such as saving for next year's needs, an emergency reserve,
or as a temporary "parking place" for your money -- the Money Market Fund may be
most suitable for you. This fund provides investors with greater stability of
principal while providing current monthly income.
Most investors have a combination of long and short-term goals. By investing in
several, or all, of the Family of Funds, you'll have the opportunity to satisfy
your many investment needs.
ASSESS TOLERANCE FOR RISK
Where you choose to invest depends as much on your tolerance for risk as on your
desire for reward. Opportunity and risk go hand-in-hand. The greater the
potential long-term opportunity, the greater the potential risk of account value
fluctuation.
The most common risk people associate with investing is short-term market
risk -- the day-to-day fluctuation in an investment's value. To lower this risk,
Nationwide's portfolio managers seek to invest only in high-quality securities.
This commitment to quality provides shareholders with a greater potential for
growth or income, while maintaining a high degree of relative stability.
Investors looking for greater growth in our common stock funds (Growth and Fund)
should be willing to accept short-term account value fluctuation. A wide range
of factors -- corporate earnings potential, interest rates, competition, and
other economic conditions -- can cause both downward and upward share price
changes.
In the past, investors with a long-term time horizon and a tolerance for
fluctuation have been rewarded. Despite years when short-term returns have not
been satisfactory, over long-term holding periods, money has grown more in the
common stock funds than in our other funds.
The income-oriented funds (Bond, Tax-Free Income and U.S. Government Income)
provide investors with greater price stability than our common stock funds. More
predictable investments can make an investor more comfortable, but the total
return potential in these funds is less than in common stock funds. Prevailing
interest rates, more than any other factor, contribute to price fluctuation in
these funds, and long-term bonds are generally affected more than shorter-term
bonds. A discussion of the relationship of interest rates and bond prices is
found on page 24.
Investors who would prefer not to have their investment principal fluctuate
should consider the Money Market Fund. While it provides the greatest price
stability, over its history it has the least long-term return potential.
One of the biggest risks investors may face is being too conservative, thereby
not earning enough return on their investments to achieve their future needs.
Another big risk to consider is the eroding value of the dollar, known as
inflation. The amount of money needed to satisfy a goal (after taking inflation
into consideration) may dictate investment in a fund with a potential for
greater returns. Although common stock funds are the most volatile over short
periods of time, they are one of the few investments that have provided
double-digit returns and exceeded inflation over long periods.
Procrastination is yet another risk investors must consider. Delay, and you take
the chance that there may not be enough time to attain your objective. Start
early and invest regularly in funds with growth opportunities, and you stand a
better chance to reach your goals.
CONSIDER YOUR TAX BRACKET
For investors seeking to shelter their investment income from federal taxes, the
Tax-Free Income Fund may be a suitable investment. The tax-equivalent yield of
this fund can be especially appealing for investors in the 28% or higher tax
brackets. To determine if a tax-free investment may be right for you, see page
26.
6
<PAGE> 8
PERFORMANCE
The following graphs show comparative performance of $10,000 invested in each of
the Nationwide Funds to the broad-based, unmanaged index primarily used as a
benchmark for measuring the performance of each Fund and to the Consumer Price
Index (CPI), a widely recognized measure of inflation. The graphs can also be
used to help you compare the past performance of the Nationwide Funds to that of
other mutual funds with similar investment objectives.
Mutual fund performance, often referred to as total return, is the change in
value of an investment in the fund over a given period, assuming reinvestment of
dividends and capital gains. Fund performance in the graphs reflect the
deduction of all applicable sales charges but have not been adjusted for income
taxes. The period covered in the graphs is the 10-year period ended December 31,
1996, (except the U.S. Government Income Fund which is from 2/10/92 (inception
date) through December 31, 1996.
NATIONWIDE(R) GROWTH FUND
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR
COVERED) S&P* GROWTH CPI**
<S> <C> <C> <C>
1987 $10,525 $ 9,776 $10,442
1988 12,268 11,979 10,903
1989 16,147 13,769 11,408
1990 15,647 12,727 12,121
1991 20,403 17,315 12,482
1992 21,956 18,406 12,852
1993 24,160 20,490 13,204
1994 24,477 20,790 13,547
1995 33,665 26,759 13,899
1996 41,389 31,227 14,358
</TABLE>
NATIONWIDE(R) FUND
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR
COVERED) S&P* FUND CPI**
<S> <C> <C> <C>
1987 $10,525 $ 9,742 $10,442
1988 12,268 11,374 10,903
1989 16,147 15,219 11,408
1990 15,647 15,265 12,121
1991 20,403 19,879 12,482
1992 21,956 20,467 12,852
1993 24,160 21,852 13,204
1994 24,477 21,979 13,547
1995 33,665 28,569 13,899
1996 41,389 35,405 14,358
</TABLE>
* The S&P 500 is a broad, unmanaged index of equity securities, and unlike the
funds, does not reflect any expenses.
** The CPI is a broad index reflecting price changes in a market basket of
goods, and unlike the funds, does not reflect any expenses.
Past results are not a guarantee of future performance. Investment results and
principal will fluctuate, and when redeemed, shares may be worth more or less
than original cost.
[PHOTOGRAPH]
Ed and Karen Reich, Money Market Fund and Bond Fund shareholders, in front of
Mt. Ranier.
[PHOTOGRAPH]
Lumir and Alice Palma, Bond Fund and Money Market Fund shareholders, with the
1956 Packard their son, Bob, restored and gave to them on their 50th wedding
anniversary in 1993.
7
<PAGE> 9
PERFORMANCE
NATIONWIDE(R) BOND FUND
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) LB GOVT/CORP. LB LT GOVT/CORP.* BOND CPI**
<S> <C> <C> <C> <C>
1987 $10,229 $ 9,916 $ 9,576 $10,442
1988 11,004 10,881 10,358 10,903
1989 12,570 12,789 11,468 11,408
1990 13,611 13,614 12,411 12,121
1991 15,606 16,273 14,506 12,482
1992 17,004 17,661 15,663 12,852
1993 18,878 20,515 17,342 13,204
1994 16,216 19,061 15,937 13,547
1995 21,720 24,769 19,786 13,899
1996 22,350 24,804 20,080 14,358
</TABLE>
The index for the Bond Fund has been changed from the Lehman Brothers Long-Term
Govt./Corp. Bond Index to the Lehman Brothers Govt./Corp. Index because it
better represents the investment policies of the Fund for comparison purposes.
* The Lehman Brothers Govt./Corp. and Long-Term Govt./Corp. Bond indexes
represent an unmanaged group of bonds that are not adjusted for expenses and
include bonds of lower quality than the Bond Fund.
** The CPI is a broad index reflecting price changes in a market basket of
goods, and unlike the funds, does not reflect any expenses.
NATIONWIDE(R) TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) LB MB* TAX-FREE CPI**
<S> <C> <C> <C>
1987 $10,150 $ 9,636 $10,442
1988 11,181 10,621 10,903
1989 12,388 11,713 11,408
1990 12,291 12,416 12,121
1991 14,904 13,761 12,482
1992 16,219 15,063 12,852
1993 18,210 16,978 13,204
1994 17,269 15,435 13,547
1995 20,284 18,135 13,899
1996 21,183 18,804 14,358
</TABLE>
* The Lehman Brothers Municipal Bond Index represents an unmanaged group of
bonds that is not adjusted for expenses and includes bonds of lower quality
than the Tax-Free Fund.
** The CPI is a broad index reflecting price changes in a market basket of
goods, and unlike the funds, does not reflect any expenses.
Past results are not a guarantee of future performance. Investment results and
principal will fluctuate, and when redeemed, shares may be worth more or less
than original cost.
NATIONWIDE(R) U.S. GOVERNMENT INCOME FUND(+)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) MLGM* USGI LBGB* CPI**
<S> <C> <C> <C> <C>
1992 $10,847 $10,638 $10,763 $10,267
1993 11,999 11,577 11,693 10,548
1994 11,612 11,165 11,439 10,822
1995 13,738 13,241 13,087 11,103
1996 14,117 13,681 13,618 11,470
</TABLE>
The index for the U.S. Government Income Fund has been changed from the Lehman
Brothers Long-Term Intermediate Government Bond Index to the Merrill Lynch
Government Master Index because it better represents the investment policies of
the Fund for comparison purposes.
(+) Period from 2/10/92 (USGI inception) through 12/31/96.
* The Merrill Lynch Government Master Index and the Lehman Brothers
Intermediate Government Bond Index represent an unmanaged group of bonds that
are not adjusted for expenses and include bonds of lower quality than the
U.S. GI Fund. The Merrill Lynch Government Master Index better represents the
investment policies of the Fund and is the new benchmark index for comparison
purposes.
** The CPI is a broad index reflecting price changes in a market basket of
goods, and unlike the funds, does not reflect any expenses.
Past results are not a guarantee of future performance. Investment results and
principal will fluctuate, and when redeemed, shares may be worth more or less
than original cost.
NATIONWIDE(R) MONEY MARKET FUND
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) Money Mkt. CPI**
<S> <C> <C>
1987 $10,616 $10,442
1988 11,372 10,903
1989 12,385 11,408
1990 13,356 12,121
1991 14,108 12,482
1992 14,562 12,852
1993 14,937 13,204
1994 15,496 13,547
1995 16,350 13,899
1996 17,164 14,358
</TABLE>
** The CPI is a broad index reflecting price changes in a market basket of
goods, and unlike the funds, does not reflect any expenses.
Past results are not a guarantee of future performance.
8
<PAGE> 10
OBJECTIVES, MANAGEMENT, PERFORMANCE & HOLDINGS
THE GROWTH FUND
is designed to serve investors who do not require current income but are
primarily interested in the growth of their capital to meet their future
financial needs.
INVESTMENT OBJECTIVE & POLICY: To achieve long-term capital appreciation without
emphasis on current return. The Fund seeks to benefit from both the underlying
economic growth of the companies it invests in, plus improvement in the
valuation of the stock.
- - LONG-TERM GROWTH WITH CAPITAL APPRECIATION AND INCOME POTENTIAL.
- - COMMON STOCK PORTFOLIO -- GENERALLY LARGER COMPANIES.
RISK PROFILE: The illustration below shows a continuum of risk. The triangle
shows where the Growth Fund falls on this continuum.
++
ARROW
<TABLE>
<S> <C>
More risk; greater Less risk; lower
potential for reward. growth potential.
</TABLE>
PORTFOLIO MANAGEMENT: Major emphasis in the selection of securities is placed on
companies which have capable management, and are in fields where social and
economic trends, technological developments, and new processes or products
indicate a potential for greater-than-average growth.
While it is generally intended to invest in common stocks or in issues
convertible to common stock, there are no restrictive provisions covering the
proportion of one or another class of securities that may be held. Therefore,
management is not in any way inhibited in the selection of appropriate
investments to reach the objectives. However, certain other restrictions exist
to protect investors.
Investments are made in different types of securities among many companies
and industries which provide diversification to minimize risk. While there is
careful selection and constant supervision by a professional investment manager,
there can be no guarantee that the Fund's objective will be achieved.
PORTFOLIO MANAGER: John M. Schaffner, MBA, CFA -- is the portfolio manager for
the Nationwide(R) Growth Fund. He has been with Nationwide since 1977 and has
managed the Growth Fund since June 1981. Schaffner graduated with a Bachelor of
Arts in Economics from Occidental College. He received his Master of Business
Administration degree from the University of Michigan and is a Chartered
Financial Analyst.
CALENDER YEAR TOTAL RETURNS (excluding sales charge)*
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
16.7% 28.7% 1.5% 11.3% 6.3% 36.1% (7.6%) 14.9% 22.5% 2.4%
1986 1985 1984 1983 1982 1981 1980 1979 1978 1977
18.4% 33.3% 8.4% 21.9% 35.6% 3.1% 18.8% 21.7% 9.9% (.7%)
1976 1975 1974 1973 1972 1971 1970 1969 1968 1967
23.6% 41.3% (34.9%) (27.5%) 8.7% 18.7% (12.0%) (9.7%) 13.5% 28.3%
</TABLE>
AVERAGE ANNUAL (COMPOUND) TOTAL RETURNS*
(For periods ending 12/31/96, $1,000 lump-sum investment minus 4.5% sales
charge)
<TABLE>
<S> <C> <C>
1 Year 5 Year 10 Year
- ------------------------------
11.5% 11.5% 12.1%
- ------------------------------
</TABLE>
* Total returns reflect market appreciation or depreciation, dividends and
capital gains for the periods ended December 31. Results shown assume
reinvestment of all distributions. Adjustments have not been made for income
taxes. Past performance is not a guarantee of future results. Investment return
and principal value will fluctuate, and when redeemed, shares may be worth more
or less than original cost.
[PIE CHART]
Repurchase Agreements = 0.8%
U.S. Government & Government Agency Securities & Other
Assets Less Liabilities = 6.0%
Corporate Bonds = 0.5%
Common Stocks = 93.2%
TOTAL VALUE OF PORTFOLIO (12/31/96) $689,931,601
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
% OF
TOP 10 HOLDINGS VALUE PORTFOLIO
<S> <C> <C>
Federal National Mortgage Association $27,224,623 3.9%
Columbia/HCA Health 24,450,000 3.5
Equitable Companies 24,354,125 3.5
Archer Daniels Midland Co. 23,862,762 3.5
Grand Metropolitan PLC 23,564,400 3.4
Allstate Corp. 23,150,000 3.4
Mobil Corp. 22,005,000 3.2
Merrill Lynch & Co., Inc. 20,375,000 3.0
Warner-Lambert Co. 18,750,000 2.7
International Business Machines 18,120,000 2.6
</TABLE>
9
<PAGE> 11
OBJECTIVES, MANAGEMENT, PERFORMANCE & HOLDINGS
THE NATIONWIDE(R) FUND
is designed to serve investors who seek long-term capital appreciation and
income through a portfolio which, based on the current market environment,
provides the greatest total return opportunities.
INVESTMENT OBJECTIVE & POLICY: To obtain a total return from a flexible
combination of current income and capital appreciation. This is accomplished by
retaining maximum flexibility in the management of the Fund's portfolio which
consists primarily of common stocks, but also includes convertible issues, bonds
and money market instruments.
- - LONG-TERM GROWTH WITH CAPITAL APPRECIATION AND INCOME POTENTIAL.
- - COMMON STOCK PORTFOLIO -- GENERALLY LARGER COMPANIES.
RISK PROFILE: The illustration below shows a continuum of risk. The triangle
shows where the Nationwide(R) Fund falls on this continuum.
++
ARROW
<TABLE>
<S> <C>
More risk; greater Less risk; lower
potential for reward. growth potential.
</TABLE>
PORTFOLIO MANAGEMENT: Major emphasis is placed on securities which provide a
combination of current income and the possibility of capital gains. The Fund
seeks to maximize shareholder returns through a diversified portfolio where the
primary emphasis is given to common stocks. Although not limited to these
investments, in the past the majority of the Fund's portfolio assets have
normally contained the common stocks of well-known, larger companies.
While it is generally intended to invest in common stocks or in issues
convertible to common stock, there are no restrictive provisions covering the
proportion of one or another class of securities that may be held. Therefore,
management is not in any way inhibited in the selection of appropriate
investments to reach the objectives. However, certain other restrictions exist
to protect investors.
Investments are made in different types of securities among many companies
and industries which provide diversification to minimize risk. While there is
careful selection and constant supervision by a professional investment manager,
there can be no guarantee that the Fund's objective will be achieved.
PORTFOLIO MANAGER: Charles Bath, MBA, CFA, CPA -- is the portfolio manager of
the Nationwide(R) Fund. Bath joined Nationwide as a securities analyst and has
managed the Nationwide(R) Fund since 1985. He graduated with a Bachelor of
Science in Accounting from Miami University. He received his Master of Business
Administration degree in Finance from The Ohio State University and is a
Certified Public Accountant and a Chartered Financial Analyst.
CALENDAR YEAR TOTAL RETURNS (Excluding sales charge)*
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
23.9% 30.0% .6% 6.8% 3.0% 30.2% .3% 33.8% 16.8% 2.0%
1986 1985 1984 1983 1982 1981 1980 1979 1978 1977
17.6% 36.4% 6.1% 15.8% 22.2% 2.0% 17.9% 9.8% .8% (9.1%)
1976 1975 1974 1973 1972 1971 1970 1969 1968 1967
26.7% 38.6% (20.3%) (6.7%) 9.7% 10.2% 8.5% (16.3%) 28.6% 29.0%
</TABLE>
AVERAGE ANNUAL (COMPOUND) TOTAL RETURNS*
(For periods ending 12/31/96, $1,000 lump-sum investment minus 4.5% sales
charge.)
<TABLE>
<S> <C> <C>
1 Year 5 Year 10 Year
- ------------------------------
18.4% 11.2% 13.5%
- ------------------------------
</TABLE>
*Total returns reflect market appreciation or depreciation, dividends and
capital gains for the periods ended December 31. Results shown assume
reinvestment of all distributions. Adjustments have not been made for income
taxes. Past performance is not a guarantee of future results. Investment return
and principal will fluctuate, and when redeemed, shares may be worth more or
less than original cost.
[PIE CHART]
Repurchase Agreements and other Assets Less Liabilities = .03%
Corporate Bonds = 0.5%
Common Stocks = 99.2%
TOTAL VALUE OF PORTFOLIO (12/31/96) $997,925,767
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
% OF
TOP 10 HOLDINGS VALUE PORTFOLIO
<S> <C> <C>
Warner-Lambert Co. $70,995,000 7.1%
Schering-Plough Corp. 52,583,475 5.3
Texaco, Inc. 46,776,188 4.7
Avon Products 39,644,750 4.0
Chubb Corp. 34,115,125 3.4
PepsiCo, Inc. 33,564,375 3.4
Raychem Corp. 30,910,222 3.1
Chrysler Corp. 30,683,400 3.1
International Business Machines 30,200,000 3.0
Mellon Bank Corp. 28,243,800 2.8
</TABLE>
10
<PAGE> 12
OBJECTIVES, MANAGEMENT, PERFORMANCE & HOLDINGS
THE BOND FUND
seeks to serve those who are less willing to accept the risks associated with
stocks through investment in income obligations, including corporate debt
securities, United States and Canadian Government obligations and commercial
paper. The average maturity of the Fund will be intermediate, which is defined
as being between 7 and 9 years.
INVESTMENT OBJECTIVE & POLICY: To generate a high level of income, consistent
with capital preservation, through investment in high-quality bonds and other
fixed-income securities. This is accomplished by retaining maximum flexibility
in the management of its portfolio consisting mainly of corporate debt
instruments.
- - MONTHLY INCOME FROM A PORTFOLIO OF HIGH-QUALITY CORPORATE AND GOVERNMENT
OBLIGATIONS.
- - INTERMEDIATE MATURITIES -- YIELDS ARE USUALLY HIGHER THAN SHORT-TERM FUNDS,
BUT WITH LOWER VOLATILITY OF RETURNS THAN LONG-TERM FUNDS.
RISK PROFILE: The illustration below shows a continuum of risk. The triangle
shows where the Bond Fund falls on this continuum.
++
ARROW
<TABLE>
<S> <C>
More risk; greater Less risk; lower
potential for reward. growth potential.
</TABLE>
PORTFOLIO MANAGEMENT: Major emphasis is placed on a diversified portfolio of
high-quality taxable debt securities including corporate debt securities rated
within the three highest credit categories by Standard & Poor's Corporation
(AAA, AA or A) or Moody's Investors Service, Inc. (Aaa, Aa or A), U.S. and
Canadian Government obligations, mortgage-backed securities, and the highest
investment grade commercial paper rated by Moody's Investors Service, Inc.
(Prime-1 or Prime-2) or by Standard & Poor's Corporation (A-1 or A-2).
The Fund may invest up to 10% of the portfolio in securities rated BBB by
Standard & Poor's Corporation or of comparable quality by Moody's Investor's
Service, Inc. These securities are commonly referred to as medium-grade
securities. Securities in this ratings group are considered by Moody's to have
some speculative characteristics. While interest payments and principal security
appear adequate at the present time, such securities lack certain protective
elements or may be characteristically unreliable over any great period of time.
Should subsequent events cause the rating of BBB securities to fall below
this rating, the Fund's Investment Manager, Nationwide Advisory Services, Inc.,
will consider such an event in determining whether the Fund should continue to
hold that security. In no event, however, would the Fund be required to
liquidate any portfolio security where the Fund would suffer a loss on the sale
of such security.
PORTFOLIO MANAGER: Douglas Kitchen, CFA -- is the portfolio manager of the
Nationwide(R) Bond Fund. He joined Nationwide in 1986 as a securities analyst
and began managing the Nationwide(R) Bond Fund on March 11, 1997. From 1992 to
March 11, 1997, he managed the bond portfolio for the Nationwide Foundation.
Kitchen received a Bachelor of Arts in Geology from Thiel College and a Bachelor
of Science in Finance from The Ohio State University and is a Chartered
Financial Analyst.
CALENDAR YEAR TOTAL RETURNS (Excluding sales charge)*
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
1.5% 24.2% (8.1%) 10.7% 8.0% 16.9% 8.2% 10.7% 8.2% 0.3%
1986 1985 1984 1983 1982 1981
12.9% 19.1% 14.1% 6.0% 31.0% 2.2%
</TABLE>
AVERAGE ANNUAL (COMPOUND) TOTAL RETURNS*
(For periods ending 12/31/96, $1,000 lump-sum investment minus 4.5% sales
charge.)
<TABLE>
<S> <C> <C>
1 Year 5 Year 10 Year
- -------------------------------
(3.1%) 5.7% 7.2%
- -------------------------------
</TABLE>
*Total returns reflect market appreciation or depreciation, dividends and
capital gains for the periods ended December 31. Results shown assume
reinvestment of all distributions. Adjustments have not been made for income
taxes. Past performance is not a guarantee of future results. Investment return
and principal will fluctuate, and when redeemed, shares may be worth more or
less than original cost.
[PIE CHART]
U.S. Government Bonds = 4.0%
Canadian Government Bonds = 4.7%
Commercial Paper, Repurchase
Agreements and other Assets And Liabilities = 2.1%
Mortgage Backed Securities = 9.5%
Corporate Bond = 79.7%
TOTAL VALUE OF PORTFOLIO (12/31/96) $128,627,612
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
% OF
TOP 10 HOLDINGS VALUE PORTFOLIO
<S> <C> <C>
Federal National Mortgage Association $8,432,706 6.6%
Berkley, (W.R.) Corp. 5,950,555 4.6
Seagram (JE) & Sons 5,715,775 4.4
U.S. Treasury Note 5,264,060 4.1
Prudential Surplus Note 5,052,515 3.9
Armstrong World Ind. 4,839,856 3.8
AMBAC Inc. 4,798,932 3.7
Aetna Life & Casualty 4,242,173 3.3
English China Clays 4,098,672 3.2
Loew's Corp. 3,984,390 3.1
</TABLE>
11
<PAGE> 13
OBJECTIVES, MANAGEMENT, PERFORMANCE & HOLDINGS
THE TAX-FREE INCOME FUND
is designed for investors seeking high monthly income free from Federal income
tax* with the degree of safety provided by high-quality municipal bonds.
INVESTMENT OBJECTIVE & POLICY: To provide as high a level of current income
exempt from Federal income tax* as is consistent with the preservation of
capital through investing in a diversified portfolio of high-quality
intermediate-term municipal obligations with maturities ranging from three to 10
years and long-term municipal obligations with maturities in excess of 10 years.
- - MONTHLY INCOME FROM AN INTERMEDIATE TO LONG-TERM MATURITY PORTFOLIO OF
HIGH-QUALITY MUNICIPAL BONDS.
- - INCOME FREE FROM FEDERAL TAXES.*
*Investors may be subject to state and local tax and the Federal alternative
minimum tax.
RISK PROFILE: The illustration below shows a continuum of risk. The triangle
shows where the Tax-Free Income Fund falls on this continuum.
++
ARROW
<TABLE>
<S> <C>
More risk; greater Less risk; lower
potential for reward. growth potential.
</TABLE>
PORTFOLIO MANAGEMENT: Major emphasis is placed on a diversified portfolio of
municipal obligations rated within the three highest credit categories (safest
investment grades) assigned by Moody's Investors Services, Inc. ("Moody's"), and
Standard & Poor's Corporation ("Standard & Poor's"), or, if not rated,
equivalent investment quality as determined by Nationwide Advisory Services,
Inc.
Such obligations include: (1) municipal securities backed by the full faith
and credit of the United States; (2) municipal bonds rated within the three
highest credit categories Aaa, Aa, or A by Moody's and/or AAA, AA, or A by
Standard & Poor's; (3) state and municipal notes rated MIG-1, MIG-2, and MIG-3
by Moody's; and (4) other types of municipal securities such as commercial
paper, provided that such securities are rated at least Prime-2 by Moody's or
A-2 by Standard & Poor's.
The Fund may, on a temporary basis or for defensive purposes, hold and
invest up to 20% of its assets in cash and in temporary taxable investments such
as Treasury notes, bills and bonds with remaining maturities of one year or
less. The Fund has, however, adopted an investment restriction which requires it
to invest at least 80% of its net assets in the types of securities listed in
the preceding paragraphs.
Although the Fund seeks to reduce risk by investing in a diversified
portfolio of high-quality securities, there can be no guarantee that the Fund's
objective will be achieved.
PORTFOLIO MANAGER: Alpha Benson, MBA -- is the portfolio manager of the
Nationwide(R) Tax-Free Income Fund. She joined Nationwide in 1977 as a financial
analyst in the Securities Investment Department. She has managed the Tax-Free
Income Fund since its inception in March 1986. Benson graduated with a Bachelor
of Science in Accounting from Central State University. She received her Master
of Business Administration degree from the University of Dayton.
CALENDAR YEAR TOTAL RETURNS (Excluding CDSC)*
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
3.7% 17.5% (9.1%) 12.7% 9.5% 10.8% 6.0% 10.3% 10.2% (3.6%)
</TABLE>
AVERAGE ANNUAL (COMPOUND) TOTAL RETURNS*
(For periods ending 12/31/96, $1,000 lump-sum investment minus the applicable
contingent deferred sales charge (CDSC) imposed on redemptions, which declines
from 5% in the first year to 0% after 5 years.)
<TABLE>
<S> <C> <C>
1 Year 5 Year Life(+)
- ----------------------------
(1.3%) 6.3% 6.5%
- ----------------------------
</TABLE>
*Total returns reflect market appreciation or depreciation, dividends and
capital gains for the periods ended December 31. Results shown assume
reinvestment of all distributions. Adjustments have not been made for income
taxes. Past performance is not a guarantee of future results. Investment return
and principal will fluctuate, and when redeemed, shares may be worth more or
less than original cost.
(+)The Tax-Free Income Fund began operations on 3/17/86.
[PIE CHART]
Aa rated = 46.4%
A rated = 23.4%
Aaa rated = 30.2%
TOTAL VALUE OF PORTFOLIO (12/31/96) $260,563,239
- ---------------------------------------------------------------
TOP TEN HOLDINGS (BY STATE)
<TABLE>
<CAPTION>
% OF
VALUE PORTFOLIO
<S> <C> <C>
Texas $35,901,363 13.8%
Virginia 35,461,194.. 13.6
Illinois 25,109,519 9.6
Washington 18,971,476 7.3
North Carolina 18,072,256 6.9
South Carolina 14,755,881 5.7
Alabama 12,981,925 5.0
Wisconsin 10,950,119 4.2
Pennsylvania 9,305,956 3.6
Massachusetts 8,023,063 3.1
</TABLE>
12
<PAGE> 14
OBJECTIVES, MANAGEMENT, PERFORMANCE & HOLDINGS
THE U.S. GOVERNMENT INCOME FUND
is designed for investors seeking high monthly income, reduced share price
fluctuations and the relative safety generally associated with a portfolio of
intermediate-term U.S. government obligations.
INVESTMENT OBJECTIVE & POLICY: To provide as high a level of current income as
is consistent with the preservation of capital by investing in securities of the
U.S. government, its agencies and instrumentalities. The average dollar-weighted
maturity of the Fund will be maintained at between three and 10 years.
- - MONTHLY INCOME FROM A PORTFOLIO OF U.S. GOVERNMENT AND AGENCY OBLIGATIONS.
- - INTERMEDIATE-TERM PORTFOLIO SEEKS LOW PRICE FLUCTUATION.
RISK PROFILE: The illustration below shows a continuum of risk. The triangle
shows where the U.S. Government Income Fund falls on this continuum.
++
ARROW
<TABLE>
<S> <C>
More risk; greater Less risk; lower
potential for reward. growth potential.
</TABLE>
PORTFOLIO MANAGEMENT: The Fund will normally invest all of its net assets in
securities issued by the U.S. government, its agencies and instrumentalities and
in repurchase agreements collateralized by these securities.
The Fund may invest up to 80% of its net assets in mortgage-related
securities which represent part ownership of a pool of mortgage loans. These
securities differ from typical bonds because principal is repaid monthly over
the term of the loan rather than returned in a lump sum at maturity. Certain
government agencies also issue collateralized mortgage obligations (CMOs) which
are fully collateralized directly or indirectly by a pool of mortgages on which
payments of principal and interest are dedicated to payment of principal and
interest on the CMOs.
The Fund may also invest up to 20% in zero-coupon securities that are direct
obligations of the U.S. government and its agencies and instrumentalities.
Short-term securities of the Fund will include obligations with remaining
maturities of less than one-year issued by the U.S. government, its agencies or
instrumentalities, and repurchase agreements.
In selecting securities for the Fund, the investment manager utilizes
interest-rate expectations, yield-curve analysis, economic forecasting, market
sector analysis, and other security selection techniques. The Fund's investments
will be concentrated in areas of the bond market (based on sector, coupon or
maturity) the investment manager believes are relatively undervalued.
Although the Fund seeks to reduce risk by investing in securities backed by
the U.S. government and its agencies and instrumentalities, there can be no
guarantee that the Fund's objective will be achieved.
PORTFOLIO MANAGERS: Wayne Frisbee, CFA; Kimberly Bingle, CFA, FLMI; and Gary
Hunt, MBA -- are the portfolio managers for the Nationwide(R) U.S. Government
Income Fund. Frisbee joined Nationwide in 1981 as a securities analyst and has
managed the Nationwide(R) U.S. Government Income Fund since its inception in
February of 1992. He received a Bachelor of Science from The Ohio State
University and is a Chartered Financial Analyst. Bingle joined Nationwide in
1986 as a securities analyst and began managing the Nationwide(R) U.S.
Government Income Fund on March 11, 1997. From April of 1992 to March 11, 1997,
she managed the Fixed Income Fund which is part of the Nationwide Insurance
Enterprise incentive savings plan. Prior to April 1992, she co-managed the
Nationwide Foundation bond portfolio. Bingle received a Bachelor of Arts in
Finance from The Pennsylvania State University. She is a Chartered Financial
Analyst and a Fellow of the Life Management Institute. Hunt joined Nationwide in
1992 as a securities analyst and began managing the Nationwide(R) U.S.
Government Income Fund on March 11, 1997. In his career at Nationwide, Hunt has
been responsible for the analysis of agency CMOs and U.S. treasury securities.
In addition, he has managed the commercial mortgage-backed securities sector for
Nationwide Life Insurance Company and its affiliates. Hunt received a Bachelor
of Science in Finance and a Master of Business Administration from The Ohio
State University.
CALENDAR YEAR TOTAL RETURNS (Excluding CDSC)*
<TABLE>
<S> <C> <C> <C>
1996 1995 1994 1993
3.3% 18.6% (3.6%) 8.8%
</TABLE>
AVERAGE ANNUAL (COMPOUND) TOTAL RETURNS
(For periods ending 12/31/96, $1,000 lump sum investment minus the applicable
contingent deferred sales charge (CDSC) imposed on redemptions, which declines
from 5% in the first year to 0% after 5 years.)
<TABLE>
<S> <C>
1 Year Life(+)
--------------------------------------
(1.6%) 6.5%
--------------------------------------
</TABLE>
*Total returns reflect market appreciation or depreciation, dividends and
capital gains for the periods ended December 31. Results shown assume
reinvestment of all distributions. Adjustments have not been made for income
taxes. Past performance is not a guarantee of future results. Investment return
and principal will fluctuate, and when redeemed, shares may be worth more or
less than original cost.
(+)The U.S. Government Income Fund began operations on 2/10/92.
[PIE CHART]
Mortgage-Backed Securities = 78.8%
U.S. Government and Agency Long-Term Obligations = 18.4%
Repurchase Agreements & Other Assets Less Liabilities = 2.8%
TOTAL VALUE OF PORTFOLIO (12/31/96) $39,100,925
- ---------------------------------------------------------------
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF
VALUE PORTFOLIO
<S> <C> <C>
FHLMC REMIC Series 1462-PT $5,102,290 13.0%
FNMA REMIC Series 1993-203 PJ 4,882,900 12.5
FHLB, 2001 4,001,300 10.2
FNMA REMIC Series 92-151-H 3,742,000 9.6
FHLMC REMIC Series 1344-D 3,726,240 9.5
FHLMC REMIC Series 31-E 3,467,758 8.9
FNMA REMIC Series 1313-G 3,033,864 7.8
FHLMC REMIC Series 1990-7-B 2,638,031 6.7
FNMA REMIC Series 1992-81-Z 2,346,703 6.0
FNMA REMIC Series 92-126 1,546,227 4.0
</TABLE>
13
<PAGE> 15
OBJECTIVES, MANAGEMENT, PERFORMANCE & HOLDINGS
THE MONEY MARKET FUND
is designed to serve investors who seek monthly income at current market rates
while maintaining share price stability -- principal is not intended to
fluctuate. There can be no assurance that the Fund will be able to maintain a
stable net asset value of $1.00 per share.
INVESTMENT OBJECTIVE & POLICY: To provide as high a level of current income as
is consistent with the preservation of capital and maintenance of liquidity,
through investment in a diversified portfolio of high-quality money market
instruments maturing in 397 days or less. This is accomplished by investing
mainly in debt securities, but the Fund shall retain maximum flexibility in the
management of its portfolio.
- - MONTHLY INCOME WITH QUICK LIQUIDITY THROUGH CHECK-WRITING PRIVILEGE.
- - HISTORICALLY MAINTAINED A FIXED SHARE PRICE THROUGH HIGH-QUALITY, SHORT-TERM
SECURITIES.
RISK PROFILE: The illustration below shows a continuum of risk. The triangle
shows where the Money Market Fund falls on this continuum.
++
ARROW
<TABLE>
<S> <C>
More risk; greater Less risk; lower
potential for reward. growth potential.
</TABLE>
PORTFOLIO MANAGEMENT: Emphasis is on a diversified portfolio having a dollar
weighted average maturity of 90 days or less. The portfolio consists of
high-quality money market instruments with a remaining maturity of 397 days or
less including, but not limited to: U.S. government and agency obligations; U.S.
dollar denominated obligations of foreign governments; obligations of commercial
banks which have assets over $500 million, and the 50 largest foreign banks with
U.S. branches; CDs of savings associations with assets over $500 million which
are FDIC members; taxable or partly taxable obligations issued by state, county
or municipal governments; commercial paper rated in one of the two highest
rating categories by at least two Nationally Recognized Statistical Rating
Organizations (NRSROs); corporate obligations at the time of purchase with the
two highest investment grades assigned by the NRSROs; and repurchase agreements
collateralized by any of the above. While it is generally intended to invest in
the above short-term debt issues, there are no restrictive provisions covering
the proportion of one or another class of securities that may be held which in
any way inhibit management in the selection of appropriate investments to reach
the objectives. However, certain other restrictions exist to protect investors.
Investments are made in different types of securities among many companies and
industries which provide diversification to minimize risk. While there is
careful selection and constant supervision by a professional investment manager,
there can be no guarantee that the Fund's objective will be achieved.
PORTFOLIO MANAGER: Patricia A. Mynster, Director of Short-Term
Investments -- began managing the Money Market Fund in July 1997 and has managed
short-term investments for over 20 years. She received a Bachelor of Arts degree
in Business Administration from Otterbein College. She has held her current
position as Director of Short-Term Investments for the Nationwide Enterprise
since 1991.
CALENDAR YEAR TOTAL RETURNS*
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
5.0% 5.5% 3.7% 2.6% 3.2% 5.6% 7.8% 8.9% 7.1% 6.2%
1986 1985 1984
6.3% 7.9% 10.4%
</TABLE>
AVERAGE ANNUAL (COMPOUND) TOTAL RETURNS*
(For periods ending 12/31/96, $1,000 lump-sum investment. There are no sales
charges on Money Market investments.)
<TABLE>
<S> <C> <C>
1 Year 5 Year 10 Year
- ------------------------------
5.0% 4.0% 5.6%
- ------------------------------
</TABLE>
*Total returns reflect dividends reinvested for the periods ended December 31.
Although the Fund's record should be considered in light of its investment
objectives and policies, past results are not a guarantee of future performance
which may be less or more. Fund results shown for the periods indicated are
without adjustment for any income taxes payable by a shareholder on reinvested
distributions. The current yield of the Money Market Fund may be more reflective
of what you could earn if you invested today. Call 1-800-637-0012 for the most
recent current yield.
[PIE CHART]
Commercial Paper = 93.4%
Canadian Government Obligations, Coporate Notes & Other Assets
Less Liabilities = 3.2%
U.S. Government & Agency Obligations = 3.4%
TOTAL VALUE OF PORTFOLIO (12/31/96) $748,610,423
- ---------------------------------------------------------------
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF
VALUE PORTFOLIO
<S> <C> <C>
Goldman Sachs Group $34,032,486 4.5%
Metropolitan Life Ins. Co. 31,112,020 4.2
Caterpillar Financial Services 30,900,003 4.1
Old Republic Corp. 30,869,506 4.1
Banc One Corp. 30,593,786 4.1
National Rural Utilities Finance Corp. 30,507,710 4.1
Ford Motor Credit Co. 30,182,033 4.0
Bear Stearns 28,586,165 3.8
Walt Disney Co. 28,453,542 3.8
Dean Witter Disover & Co. 28,156,851 3.8
</TABLE>
14
<PAGE> 16
NATIONWIDE(R) FAMILY OF FUNDS
MINIMUM INVESTMENT
GROWTH FUND; NATIONWIDE FUND; BOND FUND A minimum investment of $250 is
required, and subsequent investments of $25 or more may be made at any time.
--OR--
You may establish a systematic Automatic Asset Accumulation(SM) plan for as
little as $25 per month. See page 20. Also available for certain qualified
plans, i.e. Individual Retirement Accounts (IRA), Simplified Employee Pensions
(SEP), Profit Sharing and Money Purchase Plans.
There is an initial sales charge for investments made in the above Funds. Sales
charges decline as the amount invested increases according to the chart on page
20.
There are no sales charges on dividends and capital gains reinvested, nor is
there a charge for redeeming your investment.
TAX-FREE
INCOME FUND;
U.S. GOVERNMENT
INCOME FUND
A minimum investment of $1,000 is required, and subsequent investments of $100
or more may be made at any time.
--OR--
You may establish a systematic Automatic Asset Accumulation(SM) plan for as
little as $100 per month. See page 20. The U.S. Government Income Fund is also
available for certain qualified plans, i.e. Individual Retirement Accounts
(IRA), Simplified Employee Pensions (SEP), Profit Sharing and Money Purchase
Plans.
There is NO initial sales charge for investments made in the above Funds.
However, a contingent deferred sales charge (CDSC, see page 18) may apply to
redemptions made in these Funds. The CDSC declines to 0% after 5 years.
There is never a CDSC
on withdrawals of
dividends and capital
gains (reinvested
or taken in cash), or
realized account
appreciation.
MONEY
MARKET FUND
A minimum investment of $1,000 is required, and subsequent investments of $100
or more may be made at any time.
--OR--
You may establish a systematic Automatic Asset Accumulation(SM) plan for as
little as $100 per month. See page 20. Also available for certain qualified
plans, i.e. Individual Retirement Accounts (IRA), Simplified Employee Pensions
(SEP), Profit Sharing and Money Purchase Plans.
There are NO sales charges for Money
Market Fund investments or
withdrawals.
[PHOTOGRAPH]
Joscelyne Swift and her sister, Colbi, Nationwide(R) Fund shareholders, hunt
for Easter eggs.
15
<PAGE> 17
NATIONWIDE(R) FAMILY OF FUNDS
HOW TO PURCHASE SHARES
YOU MAY INVEST IN THREE CONVENIENT WAYS:
BY MAIL -- Complete the enclosed application and mail with your check or other
negotiable bank draft payable to: NATIONWIDE ADVISORY SERVICES, INC., THREE
NATIONWIDE PLAZA, P.O. BOX 1492, COLUMBUS, OHIO 43216-1492. Purchases must be
made in U.S. dollars only. The share price you receive will be determined as of
the close of business on the day the properly completed application is received
by Nationwide Advisory Services, Inc. (NAS) in Columbus, Ohio. Checks or drafts
drawn on non-U.S. banks are not accepted. NAS reserves the right to refuse
certain third-party checks.
BY WIRE -- To avoid mail delays on initial and subsequent investments, you can
request that your bank transmit funds (Federal Funds) by wire to the Fund's
custodian bank. In order to use this method, you must call NAS by 11 A.M.
Eastern Time, and the wire must be received by the custodian bank by 2 P.M.
Eastern Time. The bank that wires your money may charge you a fee for this
service. IF YOU CHOOSE THIS METHOD TO OPEN YOUR ACCOUNT, YOU MUST CALL OUR
TOLL-FREE NUMBER BEFORE YOU WIRE YOUR INVESTMENT. If this is an initial
investment, you must then complete and mail the application found in this
prospectus.
BY TELEPHONE (NAS NOW) -- By calling 1-800-637-0012, 24 hours a day, seven days
a week you will be connected to our new automated voice-response system, NAS
NOW. It gives you quick, easy access to mutual fund information. Select from a
menu of choices to conduct transactions and hear fund price information, mailing
and wiring instructions as well as other mutual fund information.
IN ORDER TO USE NAS NOW TO MAKE A PURCHASE YOU MUST COMPLETE ITEM 15 ON THE
APPLICATION.
The net asset value per share for each fund is determined as of the close of
the New York Stock Exchange (usually 4 P.M. Eastern Time), each day that the
exchange is open and on such other days as the Board of Trustees determines and
on days in which there is sufficient trading in the portfolio to materially
affect the net asset value of a fund. The funds will not compute net asset value
on customary business holidays, including Christmas, New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day and Thanksgiving.
The net asset value per share is computed by adding the value of all
securities and other assets in the portfolio, deducting any liabilities and
dividing by the number of shares outstanding. The purchase prices of the funds
are determined as follows:
GROWTH, FUND, AND BOND PURCHASE PRICE
Shares of the above funds are purchased at the offering price. The offering
price is determined by adding the sales charge (based as a percentage of the
offering price) to the net asset value per share. THE SALES CHARGE IS DETERMINED
ACCORDING TO THE "SALES CHARGE SCHEDULE AND AVAILABLE DISCOUNTS" SECTION ON PAGE
20. In determining net asset value, portfolio securities listed on national
exchanges are valued at the last sale price on the principal exchange, or if
there is no sale on that day, or if the securities are traded only in the
over-the-counter market, at the quoted bid prices. Expenses and fees are accrued
daily.
[PHOTOGRAPH]
Anthony Lindsay, Growth Fund shareholder, holds his sister,
Victoria, Growth Fund and Tax-free Fund shareholder.
TAX-FREE INCOME, U.S. GOVERNMENT INCOME, AND MONEY MARKET PURCHASE PRICE
Shares of the above funds are purchased at net asset value. In determining net
asset value, portfolio securities (except in the Money Market Fund) are valued
at the quoted prices obtained from an independent pricing organization which
employs a combination of methods including, among others, the obtaining of
market valuations from dealers who make markets and deal in
16
<PAGE> 18
NATIONWIDE(R) FAMILY OF FUNDS
such securities, and by comparing valuations from dealers who make markets and
deal in such securities, and by comparing valuations with those of other
comparable securities in a matrix of such securities. The pricing service
activities and results are reviewed by an officer of the Trusts. Securities of
the Funds listed on national exchanges are valued at the last sale price on the
principal exchange, or if there is no sale on that day, or if the securities are
traded only in the over-the-counter market, at the quoted bid prices. Securities
for which market quotations are not readily available are valued at fair value
in accordance with procedures adopted by the Boards of Trustees. Investments in
the Money Market Fund are valued at amortized cost. Expenses and fees are
accrued daily.
HOW TO SELL (REDEEM) SHARES
You can sell (redeem) all, or any part of, your shares of any Fund at any time.
Shares are redeemed at net asset value at the close of the New York Stock
Exchange on the day the properly completed request is received by Nationwide
Advisory Services, Inc. (NAS), at its offices in Columbus, Ohio. A CONTINGENT
DEFERRED SALES CHARGE MAY APPLY TO REDEMPTION OF SHARES OF THE TAX-FREE INCOME
OR U.S. GOVERNMENT INCOME FUNDS (see "Contingent Deferred Sales Charge," page
18).
Requests for redemptions may be in writing or by telephone (if authorized).
Payment for shares redeemed is made within 3 days of receipt. The value of
shares redeemed depends upon the market value of the investments of each fund at
the time of redemption and may be more or less than the shareholders' cost.
You cannot redeem investments which have been on deposit for a period of
less than 12 days. This is to assure that your check has cleared. To avoid this
possible 12-day delay, you may make your investment by wire (see "How To
Purchase Shares by Wire," page 17). You will receive a confirmation each time a
liquidation of shares is requested. Redemptions may be suspended or the date of
payment postponed when the New York Stock Exchange is closed (other than
customary weekend and holiday closings listed in the "How To Purchase Shares"
section, page 16), or if trading is restricted or if any emergency exists.
YOU CAN REDEEM IN ANY OF THE FOLLOWING WAYS:
BY TELEPHONE
NAS NOW -- By calling 1-800-637-0012, 24 hours a day, seven days a week, you
will automatically have access to NAS NOW to make a redemption (check mailed
to address of record) unless you declined the option in item 8 of the
application. Additional NAS NOW redemption options are also available, if
elected, in item 8. NAS NOW also gives you quick, easy access to mutual fund
information. Select from a menu of choices to conduct transactions and hear
fund price information, mailing and wiring instructions as well as other
mutual fund information.
CUSTOMER SERVICE LINE -- A check payable to the registrant of record can be
mailed to the address of record, unless you declined the option in item 8 of
the application. Redemptions of $1,000.00 or more can be wired directly to
your account at a commercial bank (voided check must be attached to the
application) or sent via Western Union, if elected in item 8 of the
application. For additional information on Western Union, please refer to
page 18 of the prospectus.
Telephone redemptions for IRAs are available upon receipt of the proper
forms. These redemptions will be subject to mandatory 10% federal income tax
withholding, unless you elect out of withholding. For further information, or
to request these forms, please call our customer service line at
1-800-848-0920.
You must call our toll-free number by 4:00 p.m. Eastern Time to receive that
day's closing share price.
The Funds will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. The Funds will not be liable for any
loss, injury, damage, or expense as a result of acting upon instructions
communicated by telephone reasonably believed to be genuine, and the Funds
will be held harmless from any loss, claims or liability arising from its
compliance with such instructions. These options are subject to the terms and
conditions set forth in the prospectus and all telephone transaction calls
may be tape recorded. The Funds reserve the right to revoke this privilege at
any time and request the redemption in writing, signed by all shareholders.
(Redemptions through NAS NOW, the automated voice-response system, will be
limited to the following registrations: Individual, Joint, Transfer on Death,
Trust, and Uniform Gift/Transfer to Minor accounts. Western Union redemptions
are not allowed through NAS NOW.)
BY BANK WIRE -- Your funds will be wired to your bank on the next business
day after your redemption order has been processed. A $5 fee will be deducted
from the proceeds for this service. Your financial institution may also
charge you a fee for receipt of the wire. (If elected, this authorization
will remain in effect until written notice of its termination is received by
NAS.)
BY ACH -- Your funds will be sent via ACH to your bank account on the second
business day after your redemption
17
<PAGE> 19
NATIONWIDE(R) FAMILY OF FUNDS
order has been processed. There is no fee to receive your funds via ACH. (If
elected, this authorization will remain in effect until written notice of its
termination is received by NAS.) Funds sent through the automated clearing
house should reach your bank in two business days.
BY WESTERN UNION -- With Western Union's Quick Cash(R) service, you can
receive your redemptions the next day across the United States or throughout
the world. If you have elected, you can phone in your request to receive
funds, next business day, at 24,000 locations - including major supermarkets
and mail-box type outlets - many open 24 hours a day, seven days a week. The
fee for the Western Union service is $9.50 per $10,000.00. Funds being sent
outside of The United States may be subject to a higher fee. This fee is
deducted from your account.
BY MAIL OR FAX (NO MINIMUM) -- Write or fax to Nationwide Advisory Services,
Inc., Three Nationwide Plaza, P.O. Box 1492, Columbus, Ohio 43216-1492 or FAX
(614) 249-8705. Please be sure that your letter or facsimile is signed exactly
as your account is registered and that your account number and the Fund from
which you wish to make the withdrawal are included. For example, if your account
is registered John Doe and Mary Doe, 'Joint Tenants With Right of Survivorship,'
then both John and Mary must sign the redemption request. For an IRA redemption,
you must include date of birth. Also, you must indicate whether or not you wish
Federal income tax (not less than 10%) to be withheld from the distribution. The
distribution will be processed effective the date the signed letter or fax is
received. Fax requests received after 4 P.M. Eastern time will be processed as
of the next business day. NAS reserves the right to require the original
document if you use the fax method.
BY MONEY MARKET CHECK WRITING -- Money Market shareholders receive free check
writing privileges (see Privilege 10, page 23 for more details). If you wish to
withdraw your money this way, please complete Section 12 of the application. You
pay no fee for this service, but the Fund reserves the right to charge for it or
to terminate this service.
IF YOU HAVE MONEY MARKET CHECK WRITING PRIVILEGES, YOU SHOULD NOT ATTEMPT TO
REDEEM YOUR ENTIRE ACCOUNT BY WRITING A CHECK. This is because dividends are
accrued daily which will not be credited to your account until the end of the
month. This could result in a small remaining balance, which would be subject to
the $2 per month fee on Money Market accounts below minimum requirements.
ALTERNATE METHODS -- In the event of significant market activity, it may be
difficult to reach Nationwide Advisory Services, Inc. by telephone. If so, an
investor may choose to use alternate methods to contact NAS such as sending
instructions by a special delivery service, or by facsimile (FAX) machine
(614-249-8705). If
you use the FAX method, NAS reserves the right to require the original document.
CONTINGENT DEFERRED SALES CHARGE
(TAX-FREE INCOME FUND AND U.S. GOVERNMENT INCOME FUND ONLY)
A contingent deferred sales charge will be imposed on any redemption which
causes the current value of your account to fall below the total amount of all
purchases made during the preceding five years. THE CONTINGENT DEFERRED SALES
CHARGE IS NEVER IMPOSED ON DIVIDENDS, WHETHER PAID IN CASH OR REINVESTED, OR ON
APPRECIATION. The contingent deferred sales charge applies only to the lesser of
the original investment or current market value.
Where the charge is imposed, the amount of the charge will depend on the
number of months since you made the purchase payment from which an amount is
being redeemed, according to the following table:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Months since purchase 0- 13- 25- 37- 49- 61 &
payment was made 12 24 36 48 60 over
- ----------------------------------------------------------------
Contingent deferred
sales charge
percentage 5% 4% 3% 2% 1% none
</TABLE>
For purposes of the charge, it is assumed that the oldest shares remaining
in your account will be sold first. All payments during a month will be
aggregated and deemed to have been made on the last day of the preceding month.
Your money will earn daily dividends through the date of liquidation. If you
redeem all of your shares, you will receive a check representing the value of
your account, less any applicable contingent deferred sales charge, on the date
of withdrawal, including all daily income dividends credited to your account
through the date of withdrawal.
THE CONTINGENT DEFERRED SALES CHARGE WILL BE WAIVED IN THE CASE OF A TOTAL
OR PARTIAL REDEMPTION FOLLOWING THE DEATH OR DISABILITY OF A SHAREHOLDER
(ACCOUNTS OWNED BY AN INDIVIDUAL OR AN INDIVIDUAL JOINTLY WITH SPOUSE) IF
REDEMPTION OCCURS WITHIN ONE YEAR OF DEATH OR INITIAL DETERMINATION OF
DISABILITY. (Also see "Waiver of Contingent Deferred Sales Charge," page 22 for
other situations where the contingent deferred sales charge will be waived.)
ACCOUNTS FALLING BELOW MINIMUM INVESTMENT REQUIREMENTS
Because of the high cost of maintaining small accounts, NAS MAY CLOSE ANY
ACCOUNT WHICH, AS A RESULT OF REDEMPTIONS, HAS A VALUE OF LESS THAN $250
(EXCLUDING AUTOMATIC ASSET
18
<PAGE> 20
NATIONWIDE(R) FAMILY OF FUNDS
ACCUMULATION(SM) accounts). However, you will be notified if your account value
is less than the required minimum, and you will be allowed 90 days to make
additional investments before the account is liquidated.
IN THE CASE OF A MONEY MARKET FUND ACCOUNT BELOW THE MINIMUM, ON AVERAGE FOR
ANY MONTH, A $2 MONTHLY FEE WILL BE ASSESSED. The fee is deposited into the Fund
to offset the expenses of carrying these small accounts. Shares are redeemed in
the first week of the following month to cover the fee.
SIGNATURE GUARANTEE
NAS reserves the right to require that your signature be guaranteed by an
authorized agent of an "eligible guarantor institution," which include, but are
not limited to, certain banks, credit unions, savings associations, and member
firms of national security exchanges. A signature guarantee is designed to
protect the shareholder by helping to prevent an unauthorized person from
redeeming shares and obtaining the proceeds. A notary public is not an
acceptable guarantor. In certain special cases (such as corporate or fiduciary
registrations), additional legal documents may be required to ensure proper
authorizations.
[PHOTOGRAPH]
Alexandra Marie Bukeavich, Bond Fund shareholder.
INVESTOR STRATEGIES
1 MONEY MARKET PLUS GROWTH(SM) -- This strategy provides the security of
principal that the Money Market Fund offers plus the opportunity for greater
long-term capital appreciation through reinvestment of dividends into one of the
common stock funds (Growth or Fund).
An initial investment of $5,000 or more is made in the Money Market, and
monthly dividends are then automatically invested into the common stock funds
(Growth or Fund) at the offering price. Money Market Plus Growth(SM) gives
investors stability of principal through the Money Market's fixed share price,
which is unaffected by market swings, and its portfolio of high quality,
short-term money market investments. And the Money Market offers instant
liquidity through unlimited free checking ($500 minimum), telephone redemption,
or NAS NOW -- all without penalty for early withdrawal. NOTE: Money Market Fund
dividends reinvested into one of the stock funds are subject to applicable sales
charges.
2 MONEY MARKET PLUS INCOME(SM) -- This strategy provides the security of
principal that the Money Market Fund offers plus the opportunity for greater
income and capital appreciation by reinvesting dividends into one of
Nationwide's bond funds (Bond, Tax-Free Income or U.S. Government Income).
An initial investment of $5,000 or more is made in the Money Market and
monthly dividends are then reinvested into a bond fund. Money Market Plus
Income(SM) allows investors the opportunity to capitalize on shifts in interest
rates.
When short-term interest rates increase, so do Money Market dividends. At
the same time, bond fund share prices generally decrease. So, with Money Market
Plus Income(SM), when you earn higher Money Market dividends, you can generally
purchase more bond fund shares at lower prices. Conversely, when interest rates
and Money Market dividends decrease, bond fund share prices usually
increase -- you will automatically buy fewer bond fund shares at higher prices.
Money Market Plus Income(SM) provides investors with stability of principal,
instant liquidity through Money Market free checking ($500 minimum), telephone
redemption, or NAS NOW, and the opportunity for greater income and capital
appreciation. NOTE: Money Market Fund dividends reinvested into one of the bond
funds are subject to applicable sales charges.
3 AUTOMATIC ASSET ACCUMULATION(SM) -- This is a systematic investment strategy
which combines automatic monthly transfers from your personal checking account
to your mutual fund account with the concept of Dollar Cost Averaging. With this
strategy, you invest a fixed amount monthly over an
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NATIONWIDE(R) FAMILY OF FUNDS
extended period of time, during both market highs and lows. Dollar Cost
Averaging can allow you to achieve a favorable average share cost over time
since your fixed monthly investment buys more shares when share prices fall
during low markets, and fewer shares at inflated prices during market highs.
Although no formula can assure a profit or protect against loss in a declining
market, systematic investing has proven a valuable investment strategy in the
past.
You can get started with Automatic Asset Accumulation(SM) for as little as
$25 a month (Growth, Fund or Bond), or $100 a month (Tax-Free Income, U.S.
Government Income or Money Market). Another way to take advantage of the
benefits that Dollar Cost Averaging can offer is through the Money Market Plus
Growth(SM) or Money Market Plus Income(SM) investor strategies.
4 AUTOMATIC ASSET ALLOCATION(SM) -- This strategy is for investors who want to
set up an account in more than one of our funds. This allows you to further
diversify your portfolio to accommodate your unique needs. If you set up your
account with Automatic Asset Accumulation(SM), additional investments can be
automatically allocated among the funds based upon your initial percentage. You
must satisfy the account minimum requirements (subsequent investments) of each
fund in which you invest. Changes to your percentage allocation can be made by
calling toll-free 1-800-848-0920.
5 AUTOMATIC ASSET TRANSFER(SM) -- This systematic investment plan is designed
especially for investors who want to invest $5,000 or more in the stock or bond
funds, but not all at one time. An initial investment of $5,000 or more is made
in the Money Market Fund, then a fixed amount that you predetermine is
transferred systematically monthly or quarterly into another Fund ($50 minimum
transfer, $100 minimum for the Tax-Free Income Fund and U.S. Government Income
Fund). The money is transferred on the 25th day of the month or on the business
day preceding the 25th day. This strategy can provide investors with the
benefits of Dollar Cost Averaging through an opportunity to achieve a favorable
average share cost over time. With this plan, your fixed monthly or quarterly
transfer from the Money Market to any Fund you select buys more shares when
share prices fall during low markets and fewer shares at higher prices during
market highs. Although no formula can assure a profit or protect against loss in
a declining market, systematic investing has proven a valuable investment
strategy in the past.
Those who have a more conservative outlook on investing can transfer smaller
sums monthly and spread the transfer of assets into another Fund over a longer
period of time, while those with a more aggressive outlook can transfer larger
sums over a shorter period. Either way, you receive the added benefits of
current rates paid on the portion of your investment in the Money Market, along
with the stability offered by the Money Market's fixed share price.
6 AUTOMATIC WITHDRAWAL PLAN(SM) ($50 OR MORE) -- You may have checks for any
fixed amount of $50 or more automatically sent bi-monthly, monthly, quarterly,
three times/year, semi-annually or annually, to you (or anyone you designate)
from your account. WITHDRAWALS MADE FROM THE TAX-FREE INCOME FUND OR U.S.
GOVERNMENT INCOME FUND UNDER THIS PLAN, LIKE OTHER REDEMPTIONS, MAY BE SUBJECT
TO A CONTINGENT DEFERRED SALES CHARGE.
NOTE: If your monthly withdrawals exceed the monthly dividends from your
account, you will be depleting principal, which will reduce your future dividend
potential.
INVESTOR PRIVILEGES
The Funds offer the following privileges to shareholders. Additional information
may be obtained by calling Nationwide Advisory Services, Inc. (NAS) toll-free at
1-800-848-0920.
1 NO SALES CHARGE ON MONEY MARKET -- You pay no sales charge when you invest or
redeem in the Money Market.
2 SALES CHARGE SCHEDULE AND AVAILABLE DISCOUNTS
INITIAL SALES CHARGE DISCOUNT
For purchases of the Growth, Fund and Bond Funds, your sales charge percentage
will be reduced according to the chart below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------
SALES CHARGE SCHEDULE As a percentage of:
If your investment plus the value Offering Amount
of other shares held is: Price Invested
- -----------------------------------------------------------
<S> <C> <C>
less than $50,000, the sales charge
is: 4.5 % 4.71%
$50,000 but less than $100,000 4.0 % 4.17%
$100,000 but less than $250,000 3.0 % 3.09%
$250,000 but less than $500,000 2.0 % 2.04%
$500,000 but less than $1,000,000 1.0 % 1.01%
$1,000,000 but less than $5,000,000 0.25% 0.25%
$5,000,000 or more 0.0 % 0.0 %
</TABLE>
Shareholders can receive even greater discounts through the cumulative
effect of the discounts below:
LIFETIME ADDITIONAL DISCOUNT
The sales charge is computed at the rate applied to the amount invested plus the
accumulated value of all shares held in any of the Nationwide Family of Funds
(except Nationwide Money Market Fund) including shares acquired by reinvestment
of dividends and capital gains distributions.
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NATIONWIDE(R) FAMILY OF FUNDS
FAMILY MEMBER DISCOUNT
In addition, all shares held in any Fund accounts (except Nationwide Money
Market Fund) of members of the registrant's family may be included, provided
these family members reside at the registrant's address.
For other discount privileges, see "Insurance Proceeds or Benefits Discount
Privilege" and "Letter of Intent (LOI) Discount," page 21.
3 NO SALES CHARGE ON REINVESTMENTS(SM) -- All dividends and capital gains may be
reinvested free of charge within the same Fund. The Trust will not mail checks
for dividends of less than $5. Dividends will be reinvested, and you will
receive a confirmation.
4 EXCHANGE PRIVILEGE(SM) -- The exchange privilege is a convenient way to
exchange shares from one Fund to another Fund in order to respond to changes in
your goals or in market conditions. There is no administrative fee, exchange fee
or limit to the number of exchanges permitted. HOWEVER, AN EXCHANGE IS A SALE
AND PURCHASE OF SHARES AND, FOR FEDERAL AND STATE INCOME TAX PURPOSES, MAY
RESULT IN A CAPITAL GAIN OR LOSS. The registration of the account to which you
are making an exchange must be exactly the same as that of the Fund account from
which the exchange is made, and the amount you exchange must meet the applicable
minimum investment of the Fund being purchased. (Shares of the Fund exchanged to
must be registered in the shareholder's state of residence).
EXCHANGES FROM GROWTH, FUND, BOND, AND MONEY MARKET FUNDS
Shares of the Growth, Fund and Bond Funds may be exchanged among any of
Nationwide's Family of Funds without sales charge, and shares of the Tax-Free
Income or U.S. Government Income Funds acquired as a result of such exchanges
will not be subject to the applicable contingent deferred sales charge normally
assessed on redemptions.
Exchanges from the Money Market Fund to any other Fund will be subject to
applicable sales charges. (For exchanges to the Growth, Fund or Bond Funds, see
"Sales Charge Schedule and Available Discounts" on page 20. For exchanges to the
Tax-Free Income or U.S. Government Income Funds, see "Contingent Deferred Sales
Charge," page 18).
EXCHANGES FROM TAX-FREE INCOME AND U.S. GOV'T INCOME FUNDS
Shares of the Tax-Free Income and U.S. Government Income Funds may be exchanged
between these two Funds without incurring any contingent deferred sales charges.
For exchanges to the Growth, Fund or Bond funds, the applicable contingent
deferred sales charge will be waived, but the investor will be subject to the
normal sales charges for the Growth, Fund and Bond funds according to "Sales
Charge Schedule and Available Discounts," page 20.
NOTE: Shareholders moving money to the Money Market Fund are subject to the
applicable contingent deferred sales charge on their redemption of Tax-Free
Income Fund or U.S. Government Income Fund shares.
EXCHANGES MAY BE MADE THREE CONVENIENT WAYS:
BY TELEPHONE
NAS NOW -- You can automatically process exchanges by calling
1-800-637-0012, 24 hours a day, seven days a week. However, if you declined
the option in item 7 of the application, you will not have this automatic
exchange privilege. NAS NOW also gives you quick, easy access to mutual fund
information. Select from a menu of choices to conduct transactions and hear
fund price information, mailing and wiring instructions as well as other
mutual fund information.
CUSTOMER SERVICE LINE -- By calling 1-800-848-0920, you may exchange shares
by telephone if the shares are not issued in certificate form. Requests may
be made only by the account owner(s). You must call our toll-free number by
4:00 p.m. Eastern Time to receive that day's closing share price.
NAS may record all instructions to exchange. NAS reserves the right at any
time without prior notice to suspend, limit or terminate the telephone
exchange privilege or its use in any manner by any person or class.
The funds will employ the same procedure described under "How to Sell
(Redeem) Shares" on page 18 to confirm that the instructions are genuine.
BY MAIL -- An exchange may be made by writing to Nationwide Advisory Services,
Inc., Three Nationwide Plaza, P.O. Box 1492, Columbus, Ohio 43216-1492. Please
be sure that your letter is signed by all owners of the account and that your
account number and the Fund you wish to exchange to are included.
ALTERNATE METHODS -- In the event of significant market activity, it may be
difficult to reach NAS by telephone. If so, an investor may choose to use
alternate methods to contact NAS such as sending instructions by a special
delivery service or by facsimile (FAX) machine (614-249-8705). If you use the
FAX method, NAS reserves the right to require the original document.
5 INSURANCE PROCEEDS OR BENEFITS DISCOUNT PRIVILEGE (GROWTH, FUND OR BOND FUNDS
ONLY) -- If the funds used to purchase shares come from proceeds or benefits of
an
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NATIONWIDE(R) FAMILY OF FUNDS
insurance policy issued by any of the Nationwide Enterprise of insurance
companies or their affiliated companies, the sales charge is one-half the rate
established, provided the purchase is made within 60 days after receipt of the
proceeds or benefits.
6 LETTER OF INTENT (LOI) DISCOUNT -- This discount permits you to purchase
shares of the Growth, Fund or Bond funds at a reduced cost during a 13-month
period if the amount invested, or the value of shares held by you and other
family members of your household, plus the amount invested (excluding
investments in Nationwide Money Market Fund), equals or exceeds $50,000. LOI is
not a binding obligation upon the investor to buy the shares. It is merely a
statement of intent.
By marking the appropriate box and signing the application, you indicate
your intention to complete the appropriate LOI. The LOI will be completed when
your new investments, together with the value of all existing shares held by
you, your spouse, minor children, and other family members of your household,
total an amount equal to the amount checked on the application. You obtain a
reduced sales charge on each share purchased during the 13-month period. The LOI
may be backdated, up to 90 days, to include previous purchases under the reduced
sales charge available under the LOI.
If the intended investment is not completed, the investor will be asked to
pay the difference between the sales charge actually paid and the sales charge
due on the amount invested according to the "Sales Charge Schedule," page 20. If
the difference is not paid within 20 days after written request, the investor
irrevocably constitutes and appoints Nationwide Advisory Services, Inc. as their
attorney-in-fact, with full power of substitution, to redeem an appropriate
number of shares from their account to cover the amount due. For more details on
the LOI Discount, call 1-800-848-0920.
7 NET ASSET VALUE PURCHASE PRIVILEGE (GROWTH, FUND, BOND FUNDS ONLY) -- All
sales of shares to the public are made at the public offering price, except the
following sales made at net asset value: (1) shares sold through institutional
sales to other registered investment companies affiliated with Nationwide
Advisory Services, Inc., (2) shares issued on transfer of investments from the
Growth, Fund or Bond funds to another Fund in the Nationwide Family of Funds
(see "Exchange Privilege," page 20), and (3) sales which may be made (a) to any
pension, profit sharing, or other employee benefit plan for the employees of
NAS, any of its affiliated companies, or investment advisory clients and their
affiliates, (b) to Trustees and retired Trustees of NIF and NIF-II; directors,
officers, full-time employees, sales representatives and their employees, and
retired directors, officers, employees, and sales representatives, their
spouses, children or immediate relatives, and immediate relatives of deceased
employees (immediate relatives include mother, father, brothers, sisters,
grandparents, grandchildren) of any of the Nationwide Enterprise Companies or
their affiliates, or any investment advisory clients of the Funds' advisor and
their affiliates, (c) to directors, officers and full-time employees, their
spouses, children or immediate relatives, and immediate relatives of deceased
employees (immediate relatives include mother, father, brothers, sisters,
grandparents, grandchildren) of any sponsor group which may be affiliated with
the Nationwide Enterprise Companies from time to time, which include but are not
limited to Farmland Industries, Inc., Maryland Farm Bureau, Inc., Ohio Farm
Bureau Federation, Inc., Pennsylvania Farmers' Association, Ruralite Services,
Inc., and Southern States Cooperative, (d) any endowment or non-profit
organization, (e) any pension, profit sharing, or deferred compensation plan
which is qualified under section 401(a), 403(b) or 457 of the Internal Revenue
Code of 1986 as amended, dealing directly with the Distributor with no sales
representative involved, at net asset value, upon written assurance of the
purchaser that the shares are acquired for investment purposes and will not be
resold except to the Trust, (f) any life insurance company separate account
registered as a unit investment trust, and (g) any qualified pension or profit
sharing plan established by a Nationwide sales representative for
himself/herself and his/her employees.
8 WAIVER OF CONTINGENT DEFERRED SALES CHARGE (TAX-FREE INCOME AND U.S.
GOVERNMENT INCOME FUNDS ONLY) -- The contingent deferred sales charge is waived
under the circumstances of a shareholder's (including either spouse on joint
spousal accounts) death or permanent disability (see "Contingent Deferred Sales
Charge," page 18). The contingent deferred sales charge is also waived on
redemptions of shares effected by: (1) any of the classes of shareholders listed
in Privilege 7, sections (1), and (3)(a) through (3)(f); and (2) shares redeemed
that were acquired as a result of a transfer of investments from the Tax-Free
Income, U.S. Government Income, Growth, Fund or Bond funds (see "Exchange
Privilege," page 20).
9 NO SALES CHARGE ON A REPURCHASE -- If you redeem all or part of your Growth,
Fund, or Bond Fund shares for which you paid sales charges, you have a one-time
privilege to reinvest all or part of the redemption proceeds in any of the NIF
Funds without a sales charge, within 30 days after the effective date of the
redemption.
If you redeem all or part of your Tax-Free Income Fund or U.S. Government
Income Fund shares on which you paid a contingent deferred sales charge, you
have a one-time privilege to reinvest all, or part, of the redemption proceeds
in either of the NIF-II Funds within 30 days and receive credit for any
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NATIONWIDE(R) FAMILY OF FUNDS
contingent deferred sales charge pro-rated according to the percentage of the
reinvestment, e.g., 100% for a full reinvestment, etc.
If you realize a gain on your redemption, the transaction is taxable and
reinvestment will not alter any capital gains tax payable. If you realize a loss
and you use the reinstatement privilege, some or all of the loss will not be
allowed as a tax deduction depending upon the amount reinvested.
10 FREE CHECKING ACCOUNT PRIVILEGE (MONEY MARKET FUND ONLY) -- You may request a
supply of free checks for your personal use and there is no monthly service fee.
You may use them to make withdrawals of $500 or more from your account at any
time. Your account will continue to earn daily income dividends until your check
clears your account. There is no limit on the number of checks you may write.
Cancelled checks will not be returned to you. However, your monthly statement
will provide the check number, date and amount of each check written. You will
also be able to obtain copies of cancelled checks by contacting one of our
service representatives at 1-800-848-0920.
INVESTOR SERVICES
1 NAS NOW AUTOMATED VOICE RESPONSE SYSTEM -- Our toll-free number 1-800-637-0012
will connect you 24 hours a day, seven days a week to NAS NOW, our new automated
voice response system. Through a selection of menu options, you can conduct
transactions, hear fund price information, mailing and wiring instructions and
other mutual fund information.
2 TOLL-FREE INFORMATION AND ASSISTANCE -- Customer service representatives are
available to answer questions regarding the Funds and your account(s) between
the hours of 8 A.M. and 5 P.M. Eastern Time. Call toll-free: 1-800-848-0920. Or
contact NAS at our FAX telephone number (614) 249-8705.
3 RETIREMENT PLANS (NOT AVAILABLE WITH THE TAX-FREE INCOME FUND) -- Shares of
the Funds may be purchased for Self-Employed Retirement Plans, Individual
Retirement Accounts (IRAs), Simplified Employee Pension Plans, Corporate Pension
Plans, Profit Sharing Plans and Money Purchase Plans. For a free information
kit, call 1-800-848-0920.
4 MUTUAL FUND GIFT CERTIFICATES -- Gift Certificates may be purchased for
special occasions such as birthdays, graduations, weddings and as appreciation
gifts. Minimum subsequent purchase amounts: $25 in the Growth, Fund or Bond
funds; $100 in the Tax-Free Income, U.S. Government Income, and Money Market
funds. NOTE: Respective minimum purchase amounts ($250 for the Growth, Fund and
Bond funds; $1,000 for the Tax-Free Income, U.S. Government Income and Money
Market funds) must be met when using gift certificates to open new accounts.
Contact one of our service representatives at 1-800-848-0920 for complete
details and instructions.
5 SHAREHOLDER CONFIRMATIONS -- You will receive a confirmation statement each
time a requested transaction is processed. However, no confirmations are mailed
on certain pre-authorized, systematic transactions. Instead, these will appear
on your next consolidated statement.
6 CONSOLIDATED STATEMENTS -- Growth and Fund shareholders receive quarterly
statements as of the end of March, June, September and December. Bond, Tax-Free
Income, U.S. Government Income and Money Market Fund shareholders receive
monthly statements. Please review your statement carefully and notify us
immediately if there is a discrepancy or error in your account.
For shareholders with multiple accounts, your consolidated statement will
reflect all your current holdings in the Funds. Your accounts are consolidated
by social security number and zip code. Accounts in your household under other
social security numbers may be added to your statement at your request.
Depending on which Funds you own, your consolidated statement will be sent
either monthly or quarterly. Only transactions during the reporting period will
be reflected on the statements. An annual summary statement reflecting all
calendar-year transactions in all your Funds will be sent after year-end.
7 AVERAGE COST STATEMENT -- This statement may aid you in preparing your tax
return and in reporting capital gains and losses to the IRS. If you redeemed any
shares during the calendar year, a statement reflecting your taxable gain or
loss for the calendar year (based on the average cost you paid for the redeemed
shares) will be mailed to you following each year-end. Average cost can only be
calculated on accounts opened on or after January 1, 1984. Fiduciary accounts
and accounts with shares acquired by gift, inheritance, transfer, or by any
means other than a purchase cannot be calculated.
Average cost is one of the IRS approved methods available to compute gains
or losses. You may wish to consult a tax advisor on the other methods available.
The information on your average cost statement will not be provided to the IRS.
If you have any questions, contact one of our service representatives at
1-800-848-0920.
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NATIONWIDE(R) FAMILY OF FUNDS
8 SHAREHOLDER REPORTS -- All shareholders will receive reports semi-annually
detailing the financial operations of the funds.
9 PROSPECTUSES -- Updated prospectuses will be mailed to you annually.
10 UNDELIVERABLE MAIL -- If mail from Nationwide Advisory Services, Inc. (NAS)
to a shareholder is returned as undeliverable on two or more consecutive
occasions, NAS will not send any future mail to the shareholder unless it
receives notification of a correct mailing address for the shareholder. Any
dividends that would be payable by check to such shareholders will be reinvested
in the shareholder's account until NAS receives notification of the
shareholder's correct mailing address.
MANAGEMENT OF THE TRUSTS
The business and affairs of the funds are managed under the direction of their
respective Boards of Trustees.
Under the terms of the Investment Management Agreement, Nationwide Advisory
Services, Inc. (NAS) manages the investment of the assets and, subject to the
supervision of the Trustees, provides various administrative services and
supervises the daily business affairs of the Trusts. NAS, an Ohio corporation,
is a wholly-owned subsidiary of Nationwide Life Insurance Company, which in turn
is a wholly-owned subsidiary of Nationwide Financial Services, Inc.
The Funds pay the Investment Manager fees based on average daily net assets
of that Fund at the rate of .5% per year. Currently the Money Market Fund pays
the Investment Manager fees of .45% per year, with the remaining .5% waived.
The Tax-Free Income and U.S. Government Income Funds pay the Investment
Manager based on average daily net assets of each Fund at the rate of .65% on
the first $250 million of average daily net assets, .60% on the next $250
million, .55% on the next $250 million, and .50% on the average daily net assets
in excess of $750 million.
At its option, the Investment Manager may waive any portion of the
management fee charged to the Money Market Fund in order to offer shareholders
the highest possible current yields consistent with the investment policies and
types of permitted investments of the Fund.
NAS, as Distributor of the Funds, markets the Funds. It also provides the
administrative and accounting services, including daily valuation of the Funds'
shares, preparation of financial statements, taxes, and regulatory reports. For
accounting services, NAS receives a total annual fee of $48,000 from NIF Funds
only.
MANAGEMENTS' DISCUSSION OF FUNDS' PERFORMANCE
Managements' discussion of the Funds' performance is contained in the Funds'
Annual Report, which will be made available upon request and without charge by
writing to NAS at Three Nationwide Plaza, P.O. Box 1492, Columbus, Ohio 43216-
1492, or call toll-free 1-800-848-0920.
TRANSFER AND DIVIDEND DISBURSING AGENT
NAS, through its wholly-owned subsidiary, Nationwide Investors Services, Inc.
(NIS), serves as transfer agent and dividend disbursing agent for the Trust.
DISTRIBUTION PLAN (TAX-FREE INCOME AND U.S. GOVERNMENT INCOME FUNDS ONLY)
The NIF-II Trust has adopted a Distribution Plan (the "Plan") under Rule 12b-1
of the Investment Company Act of 1940 which permits the Funds to compensate the
Distributor for expenses associated with the distribution of its shares. Under
the Plan, each Fund pays the Distributor compensation accrued daily and paid
monthly at a maximum annual rate of .35% of the Trust's average daily net
assets. Currently, the Tax-Free Income and U.S. Government Income Funds accrue
daily and pay monthly to the Distributor compensation at the annual rate of .20%
of the Funds' average daily net assets. The Distributor will continue to waive
the remaining .15% until further written notice.
The Distributor also receives the proceeds of contingent deferred sales
charges imposed on certain redemptions of shares (See "Contingent Deferred Sales
Charge," page 18). Distribution expenses paid by the Distributor may include the
costs of printing and mailing prospectuses and sales literature to prospective
investors, advertising, and compensation to sales personnel and broker-dealers.
EXPENSES
For the fiscal year ended October 31, 1996, the ratio of operating expenses to
average net assets was .64% for Growth, .61% for Fund, .70% for Bond, .96% for
Tax-Free Income, 1.06% for U.S. Government Income, and .60% for Money Market.
The Growth, Fund, Bond and Money Market Funds will not bear expenses in excess
of 1% of average daily net assets. Such limitations did not affect any of the
funds during the year ended October 31, 1996.
THE EFFECT OF INTEREST RATES ON BOND VALUES
All bond prices (U.S. government, municipal and corporate) are affected by
interest rates. Generally, as prevailing interest rates rise, the market value
of bonds falls. Conversely, as interest rates fall, bond market values generally
rise. Thus, if interest rates have
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NATIONWIDE(R) FAMILY OF FUNDS
increased from the time a security was purchased for a Fund, that security's
value could be less than cost, reducing the net asset value per share of the
Fund. If later sold, that security might be sold at a price less than its cost
resulting in a capital loss. Similarly, if interest rates have declined from the
time a security was purchased, that security's value could be greater than its
cost, resulting in an increase in the net asset value per share. If later sold,
it might be sold at a price greater than its cost resulting in a capital gain.
In either instance, if the security was purchased at face value and held to
maturity, no gain or loss would be realized.
The change in interest rates does not affect all bond prices equally. Many
other factors contribute to a change in value, such as the time to maturity,
supply and demand for the securities, perception of credit quality, and other
economic forces.
Generally, debt securities with shorter maturities are subject to less price
fluctuation resulting from interest rate changes. Securities with longer-term
maturities are subject to greater price fluctuation.
The table on the next page shows the effect on prices (stated as a
percentage change) of an intermediate-term bond and a long-term bond given a 1,
2 and 3 percentage point change in interest rates. As the example shows, the
longer the time to maturity, the greater the price change.
APPROXIMATE CHANGE IN
MARKET VALUE OF A BOND
<TABLE>
<CAPTION>
CHANGE IN RISING FALLING
INTEREST RATES INTEREST RATES INTEREST RATES
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
7-YEAR BOND YIELDING 8%
1% -5.1% +5.5%
2% -9.9 +11.3
3% -14.4 +17.5
30-YEAR BOND YIELDING 8%
1% -10.3% +12.5%
2% -18.9 +27.7
3% -26.2 +46.4
</TABLE>
Supply and demand also affect prices and can moderate or exaggerate the
price fluctuation resulting from changes in interest rates. Similarly, a change
in a security's credit rating (e.g., a reduction from AA-rated to A or below)
can have an adverse effect on the price of a security.
Changes in the value of portfolio securities will not affect the interest
income from those securities but will be reflected in the net asset value per
share of the Funds.
DISTRIBUTIONS AND TAXES
INCOME DIVIDENDS AND CAPITAL GAINS
Substantially all of the net investment income, if any, will be paid to
shareholders quarterly at the end of March, June, September and December by the
stock funds (Growth and Fund), and at the end of each month by the Bond,
Tax-Free Income, U.S. Government Income and Money Market funds. Checks will not
be mailed for dividends of less than $5. These dividends will be reinvested, and
you will receive a confirmation showing the transaction.
In those years in which sales of a Fund's portfolio securities result in net
realized capital gains, these gains will be distributed to shareholders in
December.
FEDERAL TAXES
Each of the Funds intends to qualify for treatment under subchapter M of the
Internal Revenue Code of 1986, as amended, (the "Code") and, therefore, must
distribute substantially all net investment income and capital gains to
shareholders annually. In general, if the Funds distribute all of their net
investment income, they are not required to pay any federal income taxes. In
addition to federal income tax, if the Funds fail to distribute the required
portion of investment income or capital gains in any year, they will be subject
to a non-deductible 4% excise tax on the amount which they have failed to
distribute. The Funds intend to make distributions in sufficient amounts to
avoid the imposition of this excise tax.
Dividends paid by each of the Funds (with the exception of the Tax-Free
Income Fund) are taxable as income to the shareholder for Federal income tax
purposes. For corporate shareholders, the appropriate portion of each year's
distribution is eligible for the corporate dividend received deduction.
Dividends paid by the Tax-Free Income Fund will be exempt from Federal
income tax to the extent that the income of the Fund is derived from bonds which
qualify for such exemption. Some portion of the income from the Tax-Free Income
Fund may be taxable annually. The taxable portion of each distribution will be
based on the ratio, each year, between the Fund's taxable income and total
income. This ratio shall be determined within 60 days following the close of the
taxable year. The annual ratio may differ significantly from the ratio for the
period actually covered by each distribution.
Under current tax law as of February 28, 1997, net long-term capital gains,
if any, realized by the Funds are generally taxable to the shareholder at the
same tax rate as ordinary income, but in no event may the tax rate on such gains
exceed 28% for an individual or 35% for a corporation.
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NATIONWIDE(R) FAMILY OF FUNDS
The Funds will annually report to each shareholder that shareholder's
portion of the net income and capital gain of each Fund, for inclusion in the
shareholder's income.
Individual and corporate shareholders may be subject to the Alternative
Minimum Tax ("AMT") if their Alternative Minimum Taxable Income ("AMTI") exceeds
the exemption amounts set forth in Section 55 of the Code. The AMT, at rates as
high as 28% for individuals and 20% for corporations, is reduced by the regular
tax due for the year. AMTI is the taxpayer's taxable income for the year for
regular tax purposes, increased by the tax preferences described in Section 57
of the Code and adjusted as described in Section 56 of the Code. Preferences
include interest from Specified Private Activity Bonds, as defined in Section 57
(a) (5) (C) of the Code. Bonds of this type may be held by one or more of the
Funds from time to time.
A shareholder may be subject to federal backup withholding at a rate of 31%
of each distribution if the shareholder fails to certify that the taxpayer
identification number given is correct and that the shareholder is not subject
to such withholding because of underreporting of income (or if the Internal
Revenue Service gives notice that such certifications are not accurate).
STATE AND LOCAL TAXES
Distributions to shareholders of the Funds may be subject to state and local
taxes, even if not subject to Federal income taxes. These laws vary, and you are
advised to consult a tax adviser regarding such taxes.
REDEMPTIONS OF SHARES
Redeeming shares may result in a capital gain or loss for tax purposes. For your
convenience, NAS provides a year-end statement, reflecting your taxable gain or
loss for the year based on the average cost paid for redeemed shares (see
"Average Cost Statement," page 23.)
[PHOTOGRAPH]
Nathan Hart, Money Market Fund shareholder, with his wife,
Carol, on their wedding day.
TAX ADVANTAGES OF THE
TAX-FREE INCOME FUND
The yield on taxable securities is normally higher than on tax-exempt securities
of comparable quality and maturity. However, you can determine whether a
tax-free investment provides a higher after-tax yield or return than an
investment subject to tax by using the following formula:
<TABLE>
<C> <C> <S>
Tax-Free Yield /100% - [Your Tax Rate] = What you must earn
on a taxable investment
to equal this tax-free yield
</TABLE>
By using current tax-free yields and your own tax rate in the formula above,
you can make an informed investment decision. This formula will not be
applicable if you are subject to the Alternative Minimum Tax (see page 25).
The table below and on the following page show the advantages of investing
in tax-exempt obligations for those individuals in higher tax brackets. Taxable
yields are compared to equivalent tax-free yields. The first table is based on
the maximum marginal tax rates currently in effect under the Internal Revenue
Code for the 1997 tax year at various levels of taxable income.
26
<PAGE> 28
NATIONWIDE(R) FAMILY OF FUNDS
For example, if you file a joint return with an adjusted gross income of
$50,000, you are in the 28% tax bracket. A 5% tax-free yield would be equivalent
to an 6.9% taxable yield for you.
Over the long term, the effect of tax-free investing is significant. With
the Tax-Free Income Fund, dividends can be automatically reinvested and allowed
to accumulate on a tax-free basis. You can see this advantage in the "How a
$20,000 Investment Grows at 5% Tax-Free vs. 5% Taxable" table below:
TAX-EQUIVALENT YIELDS BASED ON INCOME, TAX RATE, AND TAX-FREE YIELD
<TABLE>
<CAPTION>
TAX-FREE YIELD
TAXABLE INCOME* 1997 MARGINAL FEDERAL -------------------------------------------------------
JOINT RETURN SINGLE RETURN INCOME TAX RATE 4% 4.5% 5% 5.5% 6% 6.5% 7%
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$0 - 41,200 $0 - 24,650 15% 4.7 5.3 5.9 6.5 7.1 7.6 8.2
$41,200 - 99,600 $24,650 - 59,750 28% 5.6 6.3 6.9 7.6 8.3 9.0 9.7
$99,600 - 151,750 $59,750 - 124,650 31% 5.8 6.5 7.2 8.0 8.7 9.4 10.1
$151,750 - 271,050 $124,650 - 271,050 36% 6.3 7.0 7.8 8.6 9.4 10.2 10.9
Over $271,050 Over $271,050 39.6% 6.6 7.5 8.3 9.1 9.9 10.8 11.6
<CAPTION>
7.5% 8%
<C> <C>
8.8 9.4
10.4 11.1
10.9 11.6
11.7 12.5
12.4 13.2
</TABLE>
* Net amount after exemptions and deductions.
HOW A $20,000 INVESTMENT GROWS AT 5% TAX-FREE VS. 5% TAXABLE**
<TABLE>
<CAPTION>
1997 5 YEARS 10 YEARS 20 YEARS 30 YEARS
TAX -------------------- -------------------- -------------------- --------------------
BRACKET TAXABLE TAX-FREE TAXABLE TAX-FREE TAXABLE TAX-FREE TAXABLE TAX-FREE
- -------- ------- -------- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
15% $24,627 $25,525 $30,324 $32,578 $45,978 $53,066 $69,713 $86,439
28% $23,869 $25,525 $28,486 $32,578 $40,572 $53,066 $57,786 $86,439
31% $23,696 $25,525 $28,076 $32,578 $39,413 $53,066 $55,328 $86,439
36% $23,412 $25,525 $27,405 $32,578 $37,551 $53,066 $51,454 $86,439
39.6% $23,208 $25,525 $26,931 $32,578 $36,263 $53,066 $48,829 $86,439
</TABLE>
** Rates are compounded daily, and taxes are assumed to be paid once a year. The
information contained in the above chart is not a projection or guarantee of the
Fund's performance. It is only a general comparison of two investments: one
taxable and one tax-exempt. The Fund's performance may not duplicate the chart
results. The percentage return figures were chosen arbitrarily and are not a
forecast of future results.
PERFORMANCE ADVERTISING
FOR THE FUNDS
FUND PERFORMANCE ADVERTISING
The Funds may use historical performance in advertisements, sales literature,
semi-annual and annual reports and the prospectus. Such figures will include
quotations of average annual (compound) total return for the most recent one,
five, and ten-year periods (or the life of the Fund if less). Average annual
(compound) total return represents the average annual percentage change in the
value of an investment for the specified periods assuming a redemption of the
investment at the end of such periods. It reflects the changes in share price
and assumes reinvestment of all dividends and distributions at net asset value.
Average annual (compound) total return reflects the effect of maximum sales
charges.
The Funds may also choose to show nonstandard returns including total return
and simple average total return. Nonstandard returns may or may not reflect
reinvestment of all dividends and capital gains. In addition, sales charge
assumptions will vary. Initial sales charge percentages decrease as amounts
invested increase and contingent deferred sales charges decrease over time, as
outlined on pages 20 and 18 of this prospectus, respectively; therefore, returns
increase as sales charges decrease.
Total return represents the cumulative percentage change in the value of an
investment over time, calculated by subtracting the original investment from the
redeemable value and dividing the result by the original amount of the
investment. The simple average total return is calculated by dividing total
return by the number of years in the period, and unlike average annual
(compound) total return, does not reflect compounding.
27
<PAGE> 29
NATIONWIDE(R) FAMILY OF FUNDS
The Bond, Tax-Free Income and U.S. Government Income funds may advertise
their SEC yields. The SEC yield is based on a 30-day period. This yield takes
into account the yields to maturity on all debt instruments and all dividends
accrued on equity securities, since equity securities do not have maturity
dates. The SEC yield is computed by dividing the net investment income per share
earned during the 30-day period by the maximum offering price per share on the
last day of the period.
The Money Market Fund may advertise current seven-day yield quotations
computed by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one share at
the beginning of the base period to obtain a base period return and then
multiplying the base period return by (365/7). For purposes of this calculation,
the net change in account value reflects the value of additional shares
purchased with dividends from the original share, and dividends declared on both
the original share and any such additional shares. The Money Market's effective
yield represents a compounding on an annualized basis of the current yield
quotations.
RANKINGS AND RATINGS IN FINANCIAL PUBLICATIONS
The Funds may report their performance relative to other mutual funds or
investments. The performance comparisons are made to: other mutual funds with
similar objectives; other mutual funds with different objectives; or, to the
investment industry as a whole. Other investments which the Funds may be
compared to include, but are not limited to: precious metals; real estate;
stocks and bonds; closed-end funds; market indexes; fixed-rate, insured bank
CDs, bank money market deposit accounts and passbook savings; and the Consumer
Price Index.
Normally these rankings and ratings are published by independent tracking
services and publications of general interest including, but not limited to:
Lipper Analytical Services, Inc., CDA/Wiesenberger, Morningstar, Donoghue's,
Schabaker Investment Management, Kanon Bloch Carre & Co.; magazines such as
Money, Fortune, Forbes, Kiplinger's Personal Finance Magazine, Smart Money,
Mutual Funds, Worth, Financial World, Consumer Reports, Business Week, Time,
Newsweek, U.S. News and World Report; and other publications such as the Wall
Street Journal, Barron's, Columbus Dispatch, Investor's Business Daily, and
Standard & Poor's Outlook.
The rankings may or may not include the effects of sales charges.
[PHOTOGRAPH]
Emily Sullivan, Bond Fund shareholder.
The categories in which the Funds may be cited include, but are not limited to:
GROWTH FUND:
Growth Funds, Long-Term Growth Funds
NATIONWIDE FUND:
Growth and Income Funds, Growth Funds, Long-Term Growth Funds
BOND FUND:
Income Funds, High Grade Corporate Bond Funds, A-Rated Bond Funds
TAX-FREE INCOME FUND:
General Municipal Bond Funds, High-Quality Municipal Bond Funds, A-Rated
Municipal Bond Funds, Municipal Bond Funds, Tax-Free Funds
U.S. GOVERNMENT INCOME FUND:
U.S. Government Bond Funds, Intermediate-Term U.S. Government Bond Funds,
Limited-Term U.S. Government Bond Funds, U.S. Government Securities Funds,
Government Bond Funds
28
<PAGE> 30
NATIONWIDE(R) FAMILY OF FUNDS
MONEY MARKET FUND:
Money Market Funds, Current Income Funds
The comparative material found in advertisements, sales literature, or in
reports to shareholders may contain past and/or present performance ratings.
Past performance of the Funds, like any investment, is no guarantee of future
results. Future results may be less or more.
ADDITIONAL INFORMATION
STATEMENTS OF ADDITIONAL
INFORMATION
These documents (one each for the NIF and NIF-II trusts), containing more
information on the Funds, are filed with the Securities and Exchange Commission.
Free copies may be obtained from NAS upon request (see "Shareholder Inquiries,"
page 29).
DESCRIPTION OF SHARES
The assets of each Fund are segregated, and you have an interest only in the
assets of the class in which you own shares. Shares of a particular class are
equal in all respects to the other shares of that class and in the event of
liquidation of the Fund will share pro rata in the distribution of the net
assets of such Fund. All shares are of $1 par value and fully paid,
nonassessable, transferable, and redeemable. There are no preemptive rights.
JOINT PROSPECTUS DISCLOSURE
Although each Trust (NIF and NIF-II) is offering only shares of its own Funds,
it is possible that a Trust might become liable under the Securities Act of 1933
for any material misstatement or omission in the Prospectus about Funds of the
other Trust. The Trustees of each Trust have considered this in approving the
use of a single combined Nationwide Family of Funds Prospectus.
VOTING RIGHTS
Shareholders of each class of shares have one vote for each share held. Voting
rights cover the Investment Management Agreement, Distribution Agreement,
election of Trustees, termination of the Trust, sale of assets as a whole,
change of investment objectives, investment policies, investment restrictions
(NIF only), and other business matters. In regard to termination, sale of
assets, or change of investment objectives, policies and restrictions (NIF
only), the right to vote is limited to the holders of shares of the particular
class affected by the proposal.
SHAREHOLDER INQUIRIES
Inquiries regarding the Funds should be directed to Nationwide Advisory
Services, Inc., Three Nationwide Plaza, P.O. Box 1492, Columbus, Ohio
43216-1492, or call 1-800-848-0920.
[PHOTOGRAPH]
Front row, left to right: Jessica Taff and her cousin, Rebecca Taff,
Nationwide(R) Fund shareholder, with their aunt, Betsy Taff, Money Market Fund,
Nationwide(R) Fund and Growth Fund shareholder.
[PHOTOGRAPH]
William Reeves, Bond Fund shareholder, helps out with the sweet corn.
29
<PAGE> 31
NATIONWIDE(R) FAMILY OF FUNDS
NATIONWIDE INVESTING
FOUNDATION FUNDS:
Growth Fund
Nationwide Fund
Bond Fund
Money Market Fund
NATIONWIDE INVESTING
FOUNDATION II FUNDS:
Tax-Free Income Fund
U.S. Government Income Fund
NATIONAL DISTRIBUTOR AND
INVESTMENT MANAGER
Nationwide Advisory Services, Inc.
P.O. Box 1492
Three Nationwide Plaza
Columbus, Ohio 43216-1492
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215-2537
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
Nationwide Advisory Services, Inc.
(Through its wholly owned subsidiary,
Nationwide Investors Services, Inc.)
LEGAL COUNSEL
Druen, Rath & Dietrich
One Nationwide Plaza
Columbus, Ohio 43215-2220
CUSTODIAN
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263-0001
30
<PAGE> 32
NATIONWIDE(R)
FAMILY OF
FUNDS
INVESTOR
PROFILES:
NATIONWIDE(R) GROWTH FUND
is for investors seeking
to maximize capital
growth by investing in
the common stock of
companies in industries
where economic trends and
new technologies indicate
greater-than-average
growth potential.
NATIONWIDE(R) FUND is for
investors seeking to
maximize returns through
a flexible combination of
income and long-term
capital appreciation,
generally from common
stocks of well-known,
larger companies.
NATIONWIDE(R) BOND FUND
is for investors seeking
high monthly income with
the degree of safety that
can be provided through
high-quality bonds and
other fixed-income
securities.
NATIONWIDE(R) TAX-FREE
INCOME FUND is for
investors seeking high
monthly income free from
Federal taxes with the
degree of safety that can
be provided through
high-quality municipal
bonds.
NATIONWIDE(R) U.S.
GOVERNMENT INCOME FUND is
for investors seeking
high monthly income,
reduced share price
fluctuations and relative
safety of principal
through securities backed
by the U.S. government
and its agencies.
NATIONWIDE(R) MONEY
MARKET FUND is for
investors seeking monthly
income at current rates
of return with maximum
share price stability
(principal is not
intended to fluctuate).
INVESTING IN THE FUNDS
<TABLE>
<CAPTION>
Tax-Free Income
Growth U.S. Gov't
Fund Income
Bond Money Market
<S> <C> <C>
INVESTMENT MINIMUMS:
New Accounts $250 $1,000
Subsequent Investments $ 25 $ 100
</TABLE>
(Certain investor strategies, privileges and
services allow initial investments below these
minimums. See details contained within this
prospectus.)
HOW TO INVEST: A new account can be opened by
completing the application contained in this
Prospectus and mailing it along with your check made
payable to Nationwide Advisory Services, Inc. at the
address shown on the back cover. Subsequent
investments can be made by mail, wire or NAS NOW.
More details on purchasing and selling shares can be
found on pages 16 through 18.
INVESTOR STRATEGIES
Nationwide offers six investor strategies to assist
with your financial goals. A complete description of
each strategy can be found on pages 19 and 20.
MONEY MARKET PLUS GROWTH(SM)
MONEY MARKET PLUS INCOME(SM)
AUTOMATIC ASSET ACCUMULATION(SM)
AUTOMATIC ASSET ALLOCATION(SM)
AUTOMATIC ASSET TRANSFER(SM)
AUTOMATIC WITHDRAWAL PLAN(SM)
INVESTOR PRIVILEGES & SERVICES
Investors have the following privileges and services
available to them. Further details begin on page 20.
SALES CHARGE DISCOUNTS
NO SALES CHARGES ON DIVIDENDS & CAPITAL GAINS
REINVESTED
NO SALES CHARGES ON REPURCHASE
NAS NOW 24-HOUR AUTOMATED VOICE RESPONSE SYSTEM
EXCHANGE PRIVILEGES AND FREE TELEPHONE EXCHANGES
TOLL-FREE CUSTOMER ASSISTANCE
RETIREMENT PLANS (IRAS, SEPS, AND OTHERS)
MUTUAL FUND GIFT CERTIFICATES
CONSOLIDATED STATEMENTS
AVERAGE COST STATEMENT
FREE CHECKING ACCOUNT (MONEY MARKET FUND ONLY)
Nationwide(R) and LOGO are registered Federal
Service marks of the Nationwide Mutual Insurance
Company.
31
<PAGE> 33
[LOGO - NATIONWIDE ADVISORY SERVICES, INC.]
NATIONWIDE FAMILY OF FUNDS
- --------------------------
1997 PROSPECTUS
- ---------------
[LOGO-STAMP]
Nationwide(R) Family of Funds BULK RATE
Three Nationwide Plaza U.S. POSTAGE
Columbus, Ohio 43215-2220 PAID
CLEVELAND, OHIO
PERMIT NO. 1702
<PAGE> 34
APPLICATION
IMPORTANT: THE SUITABILITY AND SIGNATURE SECTIONS ON PAGE A2 MUST BE COMPLETED
TO OPEN A NEW ACCOUNT.
For IRA Plans use application from IRA Booklet. Make checks payable to:
Nationwide Advisory Services, Inc.
<TABLE>
<CAPTION>
PLEASE PRINT OR TYPE
<S> <C>
To complete application, follow Send application and check to:
instructions to the left of each For assistance in NATIONWIDE ADVISORY SERVICES, INC. NOTE:
section, then remove from opening an account: THREE NATIONWIDE PLAZA To avoid delays, do not use
prospectus booklet and mail with CALL TOLL-FREE: P.O. BOX 1492 P.O. Box for special delivery
check to address at right. 1-800-848-0920 COLUMBUS, OHIO 43216-1492 and other overnight services.
SALES REPRESENTATIVE
USE ONLY Agent Name ___________________________________________________________
Stamps are permitted provided Agent #____________________________ State # _____________ Phone # ( )_____________________
all necessary information is
included.
1 - INITIAL INVESTMENT GROWTH+ $_____________________ TAX-FREE INCOME++ $_____________________
Specify dollar amount you wish to FUND+ $_____________________ U.S. GOVERNMENT INCOME++ $_____________________
invest in each Fund (purchases BOND+ $_____________________ MONEY MARKET++ $_____________________
must be in U.S. dollars). You may + Minimum investment $250 ++ Minimum investment $1,000
allocate your investment among (or $25 monthly*) (or $100 monthly*)
any or all funds provided account
minimums are net for each fund / / Initial investment from insurance proceeds/benefits of Nationwide/Affiliate companies
(only one check needed). *MINIMUM insurance policy.
MONTHLY INVESTMENTS AVAILABLE ONLY
WITH AUTOMATIC ASSET ACCUMULATION.
2 - ACCOUNT REGISTRATION / / INDIVIDUAL / / JOINT TENANT / / GIFTS TO / / TRANSFER
a) Check only one box b) Fill in WITH RIGHT OF MINORS ON DEATH
complete name, address, telephone SURVIVORSHIP (Complete #4) (Complete pg. A5)
number, date of birth,
occupation, and employer. / / OTHER (Complete appropriate form on pages A5-A7
c) If any party is a minor, you if corporation, association, partnership, etc.)
must also complete #4 below.
d) IF YOU WISH TO NAME ONE OR
MORE BENEFICIARIES, YOU MUST ALSO ----------------------------------------------------------- -------------------------------
COMPLETE THE TRANSFER ON DEATH Name of Individual (first, middle initial, last), Custodian, Joint Tenant
FORM ON PAGE A5. Corporation, or Trustee
----------------------------------------------------------- ( ----- )------------------------
Address - Street Business Phone
----------------------------------------------------------- ( ----- )------------------------
City State Zip Home Phone
----- /----- /---------- --------------------------------- -------------------------------
Date of Birth (mo/day/yr) Occupation Employer
I am a / / Nationwide/Affiliate/Advisory Client employee/retiree/relative
/ / Nationwide Sponsor Group employee/relative
3 - SOCIAL SECURITY | | | | | | | | | | / / Initial here if you have
NUMBER/TAXPAYER been notified by the
IDENTIFICATION NUMBER / / Soc. Sec. Number or / / Tax Identification Number Internal Revenue Service
A Social Security or tax that you are subject to the
identification number is required (Required by IRS; you cannot open an account unless provided.) 31% withholding due to
by federal law. Trust account--use underreporting of income.
owner's SS number. Gifts/Transfers
to Minors account--use the minor's I am a / / U.S Citizen. / / Other (specify) ___________________________
SS number, NOT custodian's, and
complete #4 below.
4 - GIFTS/TRANSFERS TO MINORS ______________________________________________ custodian for __________________________________
Complete only if account is Custodian (one only) Minor (one only)
established under the Uniform
Gifts/Transfers to Minors Act, under the __________________________________ Uniform Gifts/Transfers to Minors Act.
making sure you report the minor's (State of Residence) ______ /______ / ______
Social Security number in #3 (Minor's Date of Birth--mo/day/yr)
above.
5 - DIVIDEND OPTION Check One: / / Reinvest Dividends and Capital Gains / / Pay Dividends in Cash and
Check how you wish to receive Reinvest Capital Gains
your dividends and capital gains. / / Pay Dividends and Capital Gains in Cash / / Pay Capital Gains in Cash and
Reinvest Dividends
/ / I want my dividends and/or capital gains deposited directly to my banking institution
(ATTACH COPY OF VOIDED CHECK).
6 - DISCOUNT PRIVILEGE / / I have other Nationwide Mutual Fund Accounts (also list below any other
To receive maximum sales charge members of your household with accounts).
discounts on purchases of the
Growth, Fund, or Bond Funds, Spouse: SS# _________ - _____ - ____________ Child: SS# _________ - _____ - ____________
check box. Also list Social
Security numbers of all members Child: SS# _________ - _____ - ____________ Child: SS# _________ - _____ - ____________
of your household with Nationwide
Mutual Fund accounts (all must Other _____________________________________ SS# _________ - _____ - _____________
reside at address listed in (Relationship)
#2 above).
</TABLE>
<PAGE> 35
<TABLE>
<S> <C>
7- EXCHANGE PRIVILEGE / / By initialing this box and signing this application below, I authorize Nationwide
You must initial this box in Investors Services, Inc. to act upon my voice recorded telephone instructions to exchange
order to exchange shares of a my account among Nationwide's Mutual Funds. I have read and agree to the terms and
Fund for shares of another Fund conditions of the telephone exchange privilege on page 21 of the prospectus. I understand
by telephone (no fee). Certain that this privilege may be suspended, limited or terminated without notice and exchanges
restrictions apply (see page may entail a sales charge.
21).
8 - TELEPHONE / / The Transfer Agent is authorized to honor telephoned requests from any registered
WITHDRAWALS shareholder for the redemption of Fund shares. (The funds will employ reasonable
Initial the box if you want to procedures for the protection of shareholders to confirm that instructions communicated
redeem shares by telephone. A by telephone are genuine such as, but not limited to, recording the conversation,
check from your account can be requiring some form of personal identification and providing written confirmation of the
sent to the address on this transaction. If these procedures are not followed, the funds may be liable for any loss
application (no fee). If you want due to unauthorized or fraudulent instructions.) Amounts of $1,000 or more can be wired
amounts of $1,000 or more wired provided that proceeds are transmitted ONLY to this bank account (ATTACH COPY OF VOIDED
to your banking institution CHECK):
($5 fee applies) fill in bank
name, address, and account Bank Name_____________________________________________________ Account No._______________
number. (Bank must be a Federal Reserve Bank member)
Bank Address______________________________________________________
City State Zip
If you want your check or cash sent
the next day to a Western Union
location, fill in the eight character
Western Union personal identification
number at the right. (Choose any 8 numbers or letters. Be sure to keep your PIN number for future reference.)
9 - SUITABILITY REVIEW PRIMARY INFORMATION
The SEC / NASD Rules require that INVESTMENT OBJECTIVE _____ Growth Potential _____Price Stability
all registered representatives _____ Income Potential _____Other /Specify____________________________
have reasonable grounds for
believing that an investment is INVESTMENT GOALS _____ Retirement _____ Savings _____ Professional Mgmt.
suitable for you. Such a decision _____ Education _____ Diversification _____ Other
is based on the facts, if any,
disclosed by you. Please answer
all questions to the best of your
ability. If you are not certain ADDITIONAL INFORMATION Estimated Annual Income Face Value of Life Cash Value of
of a particular value, please make FINANCIAL INFORMATION Insurance Life Insurance
a reasonable estimate. If a
category does not apply to you, $---------------------- $----------------------- $-------------
indicate this by entering an NA.
Value of Passbook Savings Value of Mutual Funds Value of CD's
IF YOU CHOOSE NOT TO DISCLOSE ANY
INFORMATION, YOU MUST SIGN THE $---------------------- $----------------------- $-------------
SPACE BELOW.
Value of Stocks Est. Value of Residence / Value of Bonds
Other Real Estate
$---------------------- $----------------------- $-------------
Other Assets Est. Indebtedness (Includes Mortgages and
Car Loans)
$---------------------- $-----------------------
Marital Status ___ Married ___ Single ___ Widowed ____________________
Spouse's Occupation
Number of Dependents ___ Sex ___ M ___ F
Spouse's Employer
I CHOOSE NOT TO DISCLOSE ANY SUITABILITY INFORMATION.
ADDITIONAL COMMENTS ___________________________________________________
X____________________________________________________
Client Signature ___________________________________________________
10 - SIGNATURE SECTION IMPORTANT: BOTH AGENT AND CLIENT MUST SIGN THIS SECTION OF THE APPLICATION TO OPEN A NEW ACCOUNT.
</TABLE>
I UNDERSTAND THE INVESTMENT OBJECTIVES OF THE(SE) FUND(S) AND I BELIEVE THAT
THEY ARE CONSISTENT WITH MY NEEDS AND OBJECTIVES. ALSO, I UNDERSTAND THAT THE
VALUE OF MY SHARES WILL FLUCTUATE (EXCEPT THE MONEY MARKET FUND WHICH SEEKS TO
MAINTAIN A FIXED $1.00 SHARE PRICE) AND, DEPENDING ON THE MARKET VALUE OF THE
FUNDS' INVESTMENTS AT THE TIME I REDEEM MY SHARES, I MAY RECEIVE MORE OR LESS
THAN THE ORIGINAL AMOUNT.
I AM OF LEGAL AGE, AND I HAVE RECEIVED A NATIONWIDE(R) FAMILY OF FUNDS
PROSPECTUS DATED FEBRUARY 29, 1996, AND HAVE READ IT CAREFULLY AND AGREE TO ITS
TERMS. I UNDERSTAND THAT I WILL RECEIVE A CONFIRMATION OF ALL TRANSACTIONS. I
CERTIFY, UNDER PENALTIES OF PERJURY, THAT I AM NOT SUBJECT TO BACK-UP
WITHHOLDING UNLESS INDICATED ON THE REVERSE SIDE OF THIS APPLICATION AND THAT
THE INFORMATION REGARDING TAX IDENTIFICATION AND SOCIAL SECURITY NUMBER AND
BACK-UP WITHHOLDING IS TRUE, CORRECT AND COMPLETE.
THE INTERNAL REVENUE SERVUCE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIERD TO AVOID BACKUP
WITHHOLDING.
X ___________________ X______________________________________ Date______________
SIGNATURES (WITH TITLE, IF ANY) OF ALL OWNERS SHOWN IN ACCOUNT REGISTRATION,
SECTION 2 ON PAGE A1.
APPROVED FOR SUITABILITY BY HOME OFFICE
PRINCIPAL:
X _________________ Date____________ _______________________________________
AGENT SIGNATURE (NO STAMPS) Principal's Signature
<PAGE> 36
NATIONWIDE(R) MUTUAL FUND SERVICES
COMPLETE THIS SECTION ONLY IF YOU WISH TO ELECT ONE OR
MORE OF THESE ADDITIONAL SERVICES. TO ELECT ADDITIONAL
INVESTMENT STRATEGIES, SEE PAGE A4.
<TABLE>
<S> <C>
11 - GIFT CERTIFICATE Name of Recipient:________________________________________________________________
Complete only if you are opening
a new account (for the person Giver: ___________________________________________________________________________
named in Section 2) with a gift
certificate. If you have any Occasion: _________________________________________________ Amount of Gift:_______
questions, contact one of our
service representatives at Mail Certficate to:_______________________________________________________________
1-800-848-0920 between 8 A.M. and
5 P.M. (Eastern Time) Monday thru ---------------------------------------------------------------------------
Friday before mailing
application.
12 - FREE CHECKS / / Please initial the box if you would like a supply of free checks. Be sure all
(MONEY MARKET FUND ONLY) authorized account holders sign below. Checks may be written for $500 or more only.
To receive a free supply of
checks to use for withdrawing CHECK BOX TO INDICATE / / Only one signature / / Two signatures / / ____signatures
funds from your Money Market Fund HOW MANY SIGNATURES is required are required are required
account: a) initial the first box; ARE REQUIRED
b) check the number of signatures
required to withdraw, and c) have SIGNATURES OF ALL AUTHORIZED ACCOUNT HOLDERS:
ALL authorized account holders
sign here (i.e., Joint Tenant X_________________________________________________________ X________________________________
named in the Account Registration
or all authorized individuals X_________________________________________________________ Account No.______________________
listed on the accompanying
Corporate, Partnership or In signing this section the signator(s) agree to be subject to the customary rules and
Association Certified regulations governing checking accounts and to the conditions set forth below. If the Checking
Resolutions). Account Privilege is established after the opening of the account, or if any change is made in
the above information, all signatures will have to be guaranteed.
NAMES MUST BE SIGNED EXACTLY AS The payment of funds on the conditions set forth in this section is authorized
THEY APPEAR IN THE ACCOUNT by the signature(s) appearing above. Nationwide Investors Services, Inc., the
REGISTRATION Fund's Transfer Agent, is hereby appointed agent by the person(s) signing this
card and will cause the Fund to redeem a sufficient number of shares from the
account to cover checks presented for payment without requiring signature
guarantees. The Fund and its agents will not be liable for any loss, expense or
cost arising out of check redemptions or checks returned without payment. Shares
outstanding in the account for less than 12 days will not be liquidated to pay
checks presented unless the Transfer Agent is assured that good payment has been
collected through normal banking channels. The Transfer Agent has the right not
to honor checks that are for less than $500 or checks in an amount exceeding the
value of the account at the time the check is presented for payment. This
privilege is subject to the provisions of the current prospectus of the Fund as
amended from time to time. This agreement may be modified or terminated at any
time.
</TABLE>
<PAGE> 37
NATIONWIDE(R) MUTUAL FUND INVESTOR STRATEGIES
COMPLETE THIS SECTION ONLY IF YOU WISH TO ELECT ONE OR MORE OF THESE INVESTOR
STRATEGIES.
<TABLE>
<S> <C>
13 - MONEY MARKET PLUS / / I want my monthly Money Market Fund dividends invested into indicated Fund (one
GROWTH(SM) & MONEY MARKET only).
PLUS INCOME(SM) PLANS Minimum $5,000 Money Market Fund investment. See Page 19.
Check appropriate box to select
the Fund in which you want to MONEY MARKET PLUS GROWTH(SM) / / Growth / / Fund
reinvest your monthly Money Market
Fund dividends. If you have an MONEY MARKET PLUS INCOME(SM) / / Bond / / Tax-Free Income* / / U.S. Government Income*
established account you want Money * Must have an established account.
Market dividends reinvested into,
write account number in space / / I want my Money Market dividends reinvested into my previously established account #:_____
provided. See page 19.
14 - AUTOMATIC ASSET / / I want to establish an Automatic Asset Accumulation plan. I want the specified dollar
ACCUMULATION(SM) & amount(s) invested into the Fund(s) of my choice, as specified below. NOTE: You must meet
AUTOMATIC ASSET the account minimums of each fund in which you invest. If you have any questions, please
ALLOCATION(SM) PLANS contact one of our representatives at 1-800-848-0920. See page 20 for more details.
Initialing the box and completing (YOU MUST ATTACH COPY OF A VOIDED CHECK.)
the Authorization Form below
authorizes your bank to make
monthly investments directly from Select Investment Date: / / 5th / / 15th / / 25th
your checking account into the (Choose one only)
Fund(s) of your choice in the
dollar amount(s) indicated. If you Monthly investments are to be allocated as follows:
are taking advantage of Automatic
Asset Allocation(SM) by selecting GROWTH+ $__________________ TAX-FREE INCOME++ $__________________
more than one Fund, be sure to FUND+ $__________________ U.S. GOVERNMENT INCOME++ $__________________
specify the dollar amount for each BOND+ $__________________ MONEY MARKET++ $__________________
Fund (YOU MUST MEET THE ACCOUNT + Minimum investment $25 monthly ++ Minimum investment $100 monthly
MINIMUMS FOR EACH FUND IN WHICH
YOU INVEST). See page 20.
15 - NAS NOW SPECIAL PURCHASE and / / Special Purchase Authority By initialing this box, you give NAS the authority to add bank
REDEMPTION wiring instructions to your account.
Initial the apropriate box(es) if
you want the ability to process a Bank Name:_______________________________
purchase or redemption through the (Please attach a voided check)
NAS NOW line (see page ). These
funds will be transmitted to/from / / Special Redemption Authority By initialing this box, you give NAS the authority to add
your bank through the automated telephone redemption and bank wiring instructions to your account.
clearing house.
Bank Name:_______________________________
(Please attach a voided check)
16 - AUTOMATIC ASSET / / I want to establish an Automatic Asset Transfer Plan. $50 per month minimum transfer.
TRANSFER(SM) PLAN See page 20.
Fill in the blanks and initial the Please transfer $________________ beginning __________ each / / month / / quarter
box to establish regular transfers ($50 minimum) Month/Year
from your Money Market Fund account
to the Fund account of Into the _____________________________ Fund Account # _________________________
your choice. See page 20. (if already established)
17 - AUTOMATIC / / I want to receive a check drawn on my account
WITHDRAWAL PLAN(SM) / / bi-weekly / / monthly / / quarterly / / 3/year / / semi-annually / / annually for $________.
Fill in the blanks and initial the ($50 minimum)
box allowing you to receive / / Specify month you want to receive your first check: Month_________ . Checks
checks for $50 or more monthly or will be mailed to the address indicated in Section #2 unless otherwise
quarterly from your account. See specified in writing, or you can elect direct deposit to your bank account.
page 20.
/ / Check box if you want withdrawals deposited directly to your banking institution
(ATTACH COPY OF A VOIDED CHECK).
18- LETTER OF INTENT / / I want to establish a Letter of Intent, and agree to the conditions and terms on
Initial the box and check the page 22.
amount you intend to invest in one / / $50,000 / / $100,000 / / $250,000 / / $500,000 / / $1,000,000 or more
13-month period to obtain a
reduced sales charge. See page
22.
</TABLE>
<PAGE> 38
FORMS SECTION
IF YOU CHECKED BOX MARKED "TRUST/OTHER" OF SECTION 2
OF APPLICATION, YOU MUST COMPLETE APPROPRIATE FORM FROM THIS SECTION AND
MAIL ALONG WITH APPLICATION.
TRANSFER ON DEATH (TOD)
FOR INDIVIDUAL AND JOINT TENANCY ACCOUNTS ONLY
Shareholders of each Fund may choose to have their shares transferred upon death
directly to their designated beneficiary(ies). If you choose to name one or more
beneficiaries for the account you are opening with this application, all shares
in the account, including those purchased in the future, will be transferred
directly to the designated beneficiary(ies) upon your death. If you designate
one or more beneficiaries for your account, you have the right to change or
revoke the beneficiary designation at any time in the future, without the
consent of the beneficiary(ies). If you elect to use this method of transferring
the shares in your account upon your death, please complete the section below.
This form of transfer is available only for individual and joint tenancy
accounts.
I (We) request that the mutual fund account that is opened with this application
be registered in beneficiary form under the Ohio Uniform Transfer- On-Death
Security Registration Act. I (We) assign ownership upon my (our) death to the
beneficiary(ies) named below in the percentage shares indicated. I (We) direct
the transfer agent to transfer the shares in such account and any unpaid
dividends and capital gains payments in accordance with this direction and the
provisions of the Ohio Uniform Transfer On Death Security Registration Act. If
the account created with this application is established in joint tenancy, no
transfer of ownership of shares under this beneficiary designation will occur
until the death of all owners of the account. This beneficiary designation may
be modified or revoked for the account any time prior to the death of the last
surviving owner of the account, without the consent of the beneficiary(ies),
provided the modification or revocation is on the form provided by Nationwide
Advisory Services, Inc.(NAS), and is received by NAS, in Columbus, Ohio, prior
to the death of the owner(s) of the account. NAS reserves the right to reject
any Transfer-On-Death forms which do not meet these and other terms and
conditions. NAS will only accept beneficiary designations in which shares are
divided among beneficiaries who survive shareholder(s).
FUND:________________________________ ACCOUNT NUMBER: _______________
NAME OF PRIMARY BENEFICIARY(IES): NAME OF CONTINGENT BENEFICIARY(IES):
(if he/she/they shall survive me (us)): (if primary beneficiary(ies) shall
If listing a minor as beneficiary also not survive me (us)):
list the legal guardian in whose name If listing a minor as beneficiary also
the securities will be registered. list the legal guardian in whose name
the securities will be registered.
Date of Birth Date of Birth
(1)_________________________ % of shares (1)________________________ % of shares
(2)_________________________ % of shares (2)________________________ % of shares
(3)_________________________ % of shares (3)________________________ % of shares
- -------------------------- -------------------------
Name of Guardian(if minor) Name of Guardian(if minor)
- ---------------- ---------------------------------------
Signature Date Signature Date
APPOINTMENT OF SUCCESSOR CUSTODIAN
FOR UNIFORM GIFT/TRANSFER ACCOUNT REGISTRATION ONLY
Gentleman: Account #_________________
I,______________________, hereby accept the appointment as the Successor
Custodian for this account as the Successor Custodian.______________________
Signature
I, ____________________________________, Hereby appoint _____________________ as
the Successor Custodian for this account.
------------------------------------
Signature
<PAGE> 39
I, _________________________, Hereby accept the appointment as the Successor
Custodian.
------------------------------------
Signature
